The inflation gauge the Federal Reserve relies on most to decide whether to raise or lower U.S. interest rates is likely to cement a decision by the central bank to stand pat at its next meeting at the end of July.

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.

Tariffs contributed modestly to the rise of inflation last month, analysts told ABC News, citing the price hikes in product categories made up primarily of imports. But, they added, overall price increases owed largely to a rise in housing and food products with little connection to tariffs.

With core inflation still above the US Federal Reserve's (Fed) 2% target, rates are likely to stay on hold this month although markets are anticipating a quarter percentage point cut in September, according to MIDF Research.

The producer price index for total final demand was unchanged in June, the Bureau of Labor Statistics reported.

Where’s all the inflation from the Trump trade wars? So far, the evidence really hasn’t shown up — but many economists say it’s coming soon, perhaps as soon as this week.

The report on wholesale inflation came a day after the Labor Department reported that consumer prices last month rose 2.7% from June 2024, the biggest year-over-year gain since February, as Trump’s sweeping tariffs pushed up the cost of everything from groceries to appliances.

The Indian rupee fell on Wednesday as the latest U.S. inflation report showed that tariffs were beginning to feed into prices, weakening bets on rate cuts by the Federal Reserve, which lifted U.S. Treasury yields and the dollar.