Wholesale prices grew more than expected in June

The Labor Department revealed that wholesale prices increased more than expected in June. The Producer Price Index (PPI) rose 0.2% last month due, in part, to higher utility costs.

This data came a day after lower than expected inflation figures were released, rekindling hopes that the Federal Reserve (FED) would soon cut interest rates.

CPI down 0.3%

The Consumer Price Index (CPI) stood at 3% last June, according to data released by the Bureau of Labor Statistics (BLS). The figure marked a 0.3% drop from May (when it stood at 3.3%). 

"The all-items index rose 3.0% ein the 12 months ending in June, down from 3.3% in the 12 months ending in May."

According to the BLS report, the index for all items, excluding food and energy, "rose 0.1% in June, after rising 0.2% the previous month." The indexes that rose the most in June "include housing, motor vehicle insurance, household furnishings and operations, health care, and personal care."

Cutting interest rates

In a statement, FED Chairman Jerome Powell, said that some present economic factors could be a good place to start with a cut in interest rates. Likewise, in his semiannual testimony before Congress, he made it clear that "it does not appear likely that the next policy move will be a rate hike (...) As we move further on inflation...we begin to loosen policy at the appropriate time."

Regarding financial risks, Powell stated that "elevated inflation is not the only risk we face" as cutting rates "too late or too little could unduly weaken economic activity and employment." He also added that growth in the economy has been moderating after a strong expansion in the second half of last year.