Recent July 2026 PPI data showing a 4.7% year-over-year increase—below the 4.9% consensus and down from June’s 5.5%—has anchored trader expectations for August, with month-over-month flatness driven by a 0.7% drop in goods prices offset by a 0.2% rise in services. Core measures excluding food and energy eased to 4.2% annually, reflecting lower energy costs including gasoline, while broader inflation signals remain mixed amid reaccelerating core PCE trends above 3%. With the Federal Reserve holding the policy rate at 3.5–3.75% in late July on a divided 9-3 vote and markets pricing limited near-term easing, the closely bunched probabilities around 4.6–5.1% reflect uncertainty over whether producer costs will rebound or continue moderating ahead of the September 10 release.