Producer prices surged in July, exceeding expectations as inflation rose by 0.9% from the previous month. The annual increase of 3.3% marked the highest since February. Core producer prices, excluding food and energy, also rose by 0.6%, indicating potential cost increases for consumers in the future.

Following the release of the data, stock futures slipped, reflecting concerns about the unexpected rise in producer prices. The news comes shortly after the July Consumer Price Index showed inflation in line with forecasts, with core inflation hitting a six-month high.

With consumer prices rising by 3.1% annually in July, exceeding the Fed’s 2% target, companies may pass on tariff costs to consumers through higher prices. This data, combined with labor market trends and calls for rate cuts, has led to expectations of an imminent rate cut by the Federal Reserve.

As markets anticipate a rate cut, all eyes are on Fed Chair Jay Powell’s speech at the Jackson Hole Economic Symposium on Aug. 22. Powell is expected to make a case for initiating a rate-cutting cycle in the upcoming months. Stay tuned for more updates on this evolving situation.

Read more at Yahoo Finance: Producer prices rise more than forecast as core inflation hits 3-year high in July