PPI Falls 0.3%, Warsh Calls Inflation Data 'Imperfect'
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- June PPI data showed the overall Producer Price Index fell 0.3%, with a core index excluding food, energy, and trade services up a modest 0.1%, arriving a day after a similarly disinflationary CPI report.
- Warsh told the Senate Banking Committee on Wednesday that any central bank 'would be happy to have the data going in the right direction,' but described inflation gauges as 'imperfect measures of the state of underlying inflation' and announced a Fed task force will examine how data agencies 'could do a better job in an evolving economy.'
- Market-implied odds of any rate hike this year have diminished, with a move at the Fed's July 29 policy meeting now remote following the back-to-back soft inflation prints, per Axios.
- Warsh's late remark in Tuesday's House hearing — that he would ask colleagues for 'a good family fight' about the 'extent and timing' of policy tools — suggests no decision is imminent, per Axios's read of his tone.
- Warsh appeared before the House on Tuesday and the Senate Banking Committee on Wednesday, his second consecutive day of Capitol Hill testimony.
Why it matters: Soft PPI and CPI prints paired with Warsh's language make a July 29 hold near-certain, but his 'family fight' framing — applied to a visibly divided FOMC — leaves the path for the rest of 2026 genuinely uncertain. Borrowers and rate-sensitive markets get a near-term reprieve, while Warsh's task force on inflation measurement signals the chair is questioning the very data the Fed uses to justify its next move.
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