The US Bureau of Labor Statistics will release its June Consumer Price Index on Monday, with economists expecting headline inflation to remain around 3% year-on-year as import tariffs continue to raise goods prices. The data will be closely watched by Federal Reserve policymakers.

Most economists surveyed by Reuters and Bloomberg forecast a monthly increase of roughly 0.3%, with core inflation, which excludes food and energy, staying sticky. Analysts at major banks have pointed to tariff pass-through in categories such as furniture, appliances, and apparel as a key driver of persistent price pressure.

The report follows June's earlier reading and comes as the labour market cools, with June job growth having slowed. Fed officials remain divided over whether to cut interest rates at the July meeting, according to minutes released earlier this month, with some members wary that tariffs could keep inflation elevated.

Financial markets are expected to react sharply to any surprise. A hotter-than-expected print would likely dampen hopes for a July rate cut and pressure equities, while a softer reading could strengthen the case for easing. Treasury yields and the dollar are also sensitive to the outcome.

"Tariffs are now clearly visible in the goods data, and that makes the Fed's job harder," said Morgan Stanley's chief economist, noting that the central bank must weigh sticky inflation against signs of labour market weakness.