The U.S. Federal Reserve should not cut interest rates "for some time" as the impact of Trump administration tariffs begin passing through to consumer prices, with tight monetary policy needed to keep inflationary psychology in check,

Businesses across the economy are passing increased input costs from tariffs along to consumers in the form of higher prices, the Federal Reserve’s latest anecdotal survey of domestic economic

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.

The Consumer Price Index in June rose 2.7% on an annual basis, a sign inflation around the U.S. is creeping up after declining earlier this year.

The CPI rose 0.3% month-over-month in June, accelerating from May’s 0.1% pace. Year-over-year inflation also jumped to 2.7%, up from 2.4% in May. Core CPI, which excludes food and energy, rose 0.2% in June and came in at 2.9% annually — signs that underlying inflationary pressure remains sticky.

The consumer price index for June is expected to show that Trump tariffs began to nudge inflation higher last month.

The next CPI report, which will be released ahead of the market open on Tuesday, July 15, will certainly factor into the central bank's thinking. Goldman Sachs economists expect headline CPI to rise 0.3% month over month, reflecting higher food and energy prices. This compares to the 0.1% increase seen in the May CPI.

June’s inflation report will be looked at not so much for what the headline numbers show than what’s in the underlying data.