MW Wholesale prices are flat in June, PPI shows, and point to muted effect of tariffs on inflation

By Jeffry Bartash

Yet prices are still rising fast enough to delay reduction in U.S. interest rates

Wholesale prices were unchanged in June and showed only a mild effect from U.S. tariffs, adding to the growing view that trade wars won't lead to a big increase in inflation.

The flat reading in the producer price index came in below the Wall Street forecast of a 0.2% increase.

So-called core wholesale prices were also unchanged last month. Core prices omit volatile food and energy costs and are seen as a better predictor of future inflation.

Yet the wholesale report doesn't capture the cost of imports like the consumer price index, which showed a sharper increase last month.

The rise in the cost of living in June probably killed the already slim chance of the Federal Reserve cutting interest rates later this month.

Read: Consumer prices posted the biggest rise in June in five months.

Wholesale prices reflect the costs companies pay for supplies or for products they intend to sell directly to consumers. When these prices change, it usually influences the rate of inflation.

Big picture: The cost of some goods such as toys, consumer electronics clothes and appliances have shown tariff-related price increases in the past few months and inflation in the U.S. has risen a bit. But there's been no big surge in inflation.

Top Fed officials and Wall Street economists predict prices will rise faster in the next few months as the full effect of tariffs become clear. And that could push inflation to 3% or higher.

The increase is expected to be short-lived, however, and give the Fed the leeway to cut interest rates later this year as the effect of the tariffs fade.

Market reaction: The Dow Jones Industrial Average DJIA and S&P 500 SPX were set to rise in Wednesday trading.

-Jeffry Bartash

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July 16, 2025 08:50 ET (12:50 GMT)

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