The Consumer Price Index was unchanged in June, according to the Bureau of Labor Statistics. That left its yearly advance at only 1.6%, nearly half a point below the Federal Reserve’s target (the core CPI was up 1.7%). After the announcement, some economists and market strategists wondered whether the Fed would rethink its plans for a third interest rate hike in 2017. The Producer Price Index rose 0.1% in June, leaving its yearly increase at 2.0%.^1,2

1 – bloomberg.com/news/articles/2017-07-07/wage-weakness-amid-solid-hiring-adds-to-u-s-economic-puzzle [7/7/17]

2 – cnbc.com/2017/07/03/june-ism-manufacturing-index.html [7/3/17]

INFLATION PRESSURE WEAKENS