Producer Prices Stall, Inflation Concerns Linger

Last month, the producer-price index, a key indicator of inflation, remained flat, missing forecasts for a 0.2% rise. This data is closely watched by economists as it is used to calculate the Federal Reserve's preferred inflation metric, the personal-consumption expenditures price index. In May, core PCE inflation, which excludes volatile food and energy prices, ticked up to 2.7%. Without more progress toward the Fed's 2% inflation target, a rate cut at the central bank's next meeting later this month is seen as unlikely. The stagnant producer prices and persistent inflation above the Fed's goal pose a challenge for policymakers as they navigate the delicate balance between supporting economic growth and controlling price pressures.