The US Bureau of Labor Statistics releases July Consumer Price Index data on Monday, with economists expecting annual inflation to hold near 3% as import tariffs continue to lift goods prices. The report will shape expectations for the Federal Reserve's September meeting.

Economists surveyed by Reuters and Bloomberg forecast a monthly increase of roughly 0.3% in the headline index and a similar gain in core CPI, which excludes food and energy. Goldman Sachs and JPMorgan analysts have flagged tariff-related price pressures on furniture, appliances and apparel as a growing contributor to the core measure.

The data arrives after July payroll growth fell below 100,000, signalling a cooling labour market. Soft hiring combined with sticky inflation has complicated the Federal Reserve's path, leaving policymakers weighing employment risks against the possibility that tariffs keep price growth elevated into 2027.

Investors will scrutinize the figures for clues on whether the Federal Open Market Committee cuts rates in September. Futures markets tracked by CME Group's FedWatch tool have priced in a strong probability of at least one reduction this year, and a hotter-than-expected print could trim those bets and pressure equities.

Fed Chair Jerome Powell has repeatedly said the central bank needs greater confidence that inflation is returning sustainably to its 2% target before easing further. Treasury yields and the dollar are likely to react sharply to any surprise in either direction.