Consumer prices showed a faster year-over-year increase in July, according to the latest data from the Bureau of Labor Statistics released Thursday morning.
The Consumer Price Index (CPI) rose 0.2% over last month and 3.2% over the prior year last month, in-line with June's 0.2% month-over-month increase but a slight acceleration compared to the month's 3% annual gain.
Both measures were roughly in line with economist forecasts, according to data from Bloomberg.
On a "core" basis, which strips out the more volatile costs of food and gas, prices in June climbed 0.2% over the prior month and 4.7% over last year — roughly on par with June. Both measures were also in-line with economist expectations.
Inflation has remained significantly above the Federal Reserve's 2% target.
That, along with a labor market that Fed Chair Jerome Powell has described as "very tight," suggests the Federal Reserve will continue to raise interest rates later this year. But prior to the report, markets were widely expecting the central bank to pause its hikes at its meeting next month.
Immediately following the release of the data, markets were pricing in a roughly 85% chance the Federal Reserve keeps rates unchanged at its Sept. 20 policy meeting, according to data from the CME Group.
The central bank raised rates by another 0.25% in July after pausing its aggressive rate-hiking cycle in June.
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