U.S. June inflation cools as CPI and PPI fall, trimming Fed hike bets

U.S. June inflation data pointed to broader easing, with headline CPI falling 0.4% month on month for its first monthly decline in six years and PPI falling 0.3%, the biggest drop in 14 months, helping sharply reduce expectations of a near-term Federal Reserve rate hike. Annual CPI was reported at 3.5%, annual PPI at 5.5%, and core PPI rose 0.2% on the month and 4.7% from a year earlier, while the prior monthly PPI reading was revised down to 0.6% from 1.10%. Markets cut the implied probability of a July Fed hike to as low as 11%-13% from roughly 43%-45% earlier in the week, Treasuries rallied, and the dollar hovered near a one-month low. White House official Kevin Hassett said the CPI data left "not really an excuse for raising rates right now," while Fed Chair Kevin Warsh said it was not his view that inflation meant "mission accomplished," underscoring uncertainty over whether disinflation will prove durable, especially with oil prices rising amid U.S.-Iran hostilities.