Former Treasury Secretary Lawrence Summers warned that President Donald Trump’s bid to assert control over the Federal Reserve and drive down interest rates could trigger a surge in inflation expectations that pushes up long-term borrowing costs.

A weaker U.S. dollar may fundamentally benefit some areas of the stock market, but “it could also potentially drive higher import costs, pressure consumers and flow through to inflation,” according to a note Thursday from Morgan Stanley Wealth Management.

A number of factors, including a lack of significant gains in auto prices, are masking the extent of the shift.

The figure for June marks the fastest rate of inflation, which measures how quickly prices are rising, since January 2024.

The report on producer prices adds to a mixed picture for inflation as the economy adjusts to the imposition of import tariffs.

A fresh report on Tuesday marked two consecutive months of rising inflation. Consumer prices rose 2.7% in June compared to a year ago, marking a notable surge of price increases as President Donald Trump's tariff policy took hold and some retailers warned they may pass some of the tax burden onto shoppers.

The Bureau of Labor Statistics reported that the consumer price index (CPI), a popular inflation gauge, increased in June to 2.7% on an annual basis as prices rose for consumers.

Expectations for widespread price hikes following a wave of new tariffs this year have largely fallen short, surprising economists and fueling claims from tariff defenders that the levies are having no impact on inflation.