July producer prices held flat month-over-month, below forecasts, reinforcing expectations for a Fed pause in September.
US Treasury yields fell modestly Thursday after July’s producer price index showed no month-over-month increase, missing the +0.2% consensus estimate. The 0.0% print marked the softest reading since December 2023, signaling easing wholesale inflation pressures.
June’s PPI had risen 0.2%, while economists polled by Bloomberg had anticipated a repeat in July. Year-over-year, producer prices climbed 2.2%, down from June’s 2.7% pace, aligning with broader disinflation trends.
The cooler-than-expected data bolstered market pricing for a Federal Reserve rate hold in September, with traders now assigning a 70% probability to no change, up from 65% before the release.