The US Bureau of Labor Statistics released its July Consumer Price Index on Tuesday, with economists expecting annual inflation to hold at or slightly above 3% as import tariffs continued to push up goods prices.

Economists polled by Reuters had forecast a monthly increase of roughly 0.3% in the headline index, with core CPI—which excludes food and energy—expected to rise about 0.3% as well. The figures follow June data showing price pressures building in categories exposed to the Trump administration's tariff regime, including furniture, appliances and apparel.

The reading arrives as the Federal Reserve weighs the timing of interest rate cuts. Chair Jerome Powell has said the central bank wants greater confidence that inflation is moving sustainably toward its 2% target before easing further, and Federal Reserve officials have flagged tariffs as an upside risk to prices.

Traders in federal funds futures had priced in expectations for a rate cut at the Fed's September meeting, according to CME Group's FedWatch tool. A hotter-than-expected CPI print would likely dampen those bets, while a softer reading could strengthen the case for near-term easing. Equity and Treasury markets were positioned for volatility around the release.

The data also feeds into a political debate over the economic impact of tariffs. The White House has argued that price effects would be temporary, while economists at Goldman Sachs and other institutions have warned that duties are being passed through to consumers with a lag.