Producer Prices Signal Stability, Not Stimulus

The latest US Producer Price Index (PPI) data for May delivered a muted message: no inflationary flare, no hawkish pressure. Headline PPI rose 2.6% year-on-year, precisely in line with expectations. Core PPI, excluding food and energy, slowed modestly from 3.1% to 3.0% on an annual basis. Monthly figures for both core and headline came in at just 0.1%.

These are not the kind of prints that move markets on their own. They are, however, critical signals when placed in context.