Overview

• Producer prices climbed 0.9% in July versus forecasts of 0.2%, marking the fastest monthly wholesale inflation gain since June 2022.
• Odds of a 50 basis-point rate cut in September fell to zero, while CME FedWatch shows a roughly 92% probability of a 25-point reduction.
• Treasury yields rose sharply, with two-year notes near 3.73% and 10-year yields around 4.29%, and the dollar index gained about 0.5% as equities stalled.
• Market strategists linked the PPI spike to U.S. tariffs driving higher input costs and warned of potential pass-through to consumer prices.
• Investors are now focused on Jackson Hole Fed speeches and upcoming U.S. retail sales, CPI and PCE reports to judge whether wholesale pressures will endure.