Investing.com -- Growth in U.S. producer prices eased by more than expected in June in the latest sign of fading inflationary pressures in the world's largest economy, bolstering the case for the Federal Reserve to step back from its aggressive policy tightening campaign after an expected interest rate hike later this month.
According to data from the Bureau of Labor Statistics, the seasonally-adjusted producer prices for the month eased to 0.1% annually, decelerating from a downwardly revised mark of 0.9% in May. Economists had seen the figure rising by 0.4%.
On a month-on-month basis, the number also ticked up by 0.1%, rebounding from a contraction of 0.4% in the prior month. Forecasts had called for an increase of 0.2%.
The Fed is widely tipped to raise borrowing costs by another 25 basis points at their upcoming policy meeting in late July. Investing.com's Fed Rate Monitor Tool shows that there is a more than 91% chance that the central bank will lift rates at the gathering.
But some uncertainty remains over whether policymakers will then move away from its long-standing tightening cycle, which the Fed instituted to help corral red-hot inflation. In the wake of the latest producer price index, as well as softer-than-anticipated consumer prices on Wednesday, the probability that the Fed will keep rates steady at their September meeting stands at over 81%.