WASHINGTON (AP) — U.S. wholesale inflation fell from May to June on plunging energy prices, but intensifying hostilities with Iran are clouding the outlook.The Labor Department reported Wednesday that its producer price index — which captures inflation before it reaches consumers — dropped 0.3% from May, biggest decline since April 2025 and a reversal from a 0.6% uptick the month before. Compared to a year earlier, wholesale prices were up 5.5% in June, decelerating from a 6% increase the month before. Gasoline prices plunged 12% in June but are still up nearly 43% from June 2025, pushed higher by the Iran war. Food prices also dipped in June. Excluding volatile food and energy prices, so-called core wholesale prices were up 4.7% from June 2025 and 0.2% from May.The producer price report came out a day after the Labor Department said consumer prices dropped 0.4% from May to June, the biggest monthly drop in four years. Compared to a year earlier, they were up 3.5% last month, down from 4.2% in May. The June inflation numbers were much cooler than forecasters had expected, reducing pressure on the Federal Reserve to raise interest rates this year. Still, inflation is running above the Fed’s 2% target.In his first appearance before Congress since becoming Fed chair May 22, Kevin Warsh said Tuesday that the central bank has “no tolerance for persistently elevated inflation.’'