This all but seals the deal on a coming cessation in Fed tightening,

The markets are assuming that the Fed are finished tightening for the year, ... That presumption might prove to be premature. We, and the Fed, will wait and see.

While the rise in core prices is a bit uncomfortably high, this stand-alone report is not evidence that soaring energy prices are feeding into other prices.

The cooling U.S. housing sector should apply a dampener to consumer spending as 2005-2006 unfolds, but some of this could be offset by still-decent job growth.

June's swoon is indeed proving to be temporary,

Bearing in mind that the Fed wants higher inflation, the news is not unwelcome. And the market will remain firmly in the camp that the Fed will not tighten soon, ... Nevertheless, the risks from the PPI are easy to see and look real in light of the big decline of the dollar and rise in import costs that preceded them.