The case for a U.S. interest rate cut remains unresolved as Federal Reserve officials head into their policy meeting later this month, with data showing fresh signs of higher inflation and President Donald Trump intensifying his demands for lower borrowing costs.

On Friday the president repeated his criticism of Powell and said the Fed's policy rate should be 1 per cent, a low level typically used by the Fed to boost a weak economy not, as the Fed is currently attempting to do, temper inflation with tight monetary policy.

The June inflation data is likely to keep Federal Reserve officials cautious, open to cutting interest rates later this year without committing to any course of action. The consumer-price index wasn’t

Tuesday's mixed CPI report has further solidified expectations that the Fed will continue to hold interest rates steady. Read more here.

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 was forecast to rise 2.7% last month, higher than last month's rate of 2.4%, according to economists polled by financial data firm FactSet.

Initial early gains following the June data were reversed as pass-through effects from tariffs stoke concerns.

While pundits looked with their magnifying glasses for tariffs in consumer goods prices, it was in services, which are not tariffed, where inflation took off again.

Consumer prices posted the biggest increase in June in five months and are likely to keep the Federal Reserve from cutting interest rates soon, but there only scattered signs of tariff-related inflation.