Here's what new data from the producer price index says about where inflation is headed, according to economists.

The stock markets were unanimously pleased with the latest CPI inflation print. Check out my key takeaways from the latest CPI inflation report.

A key measure of consumer prices in July posted the biggest increase in six months, suggesting inflation is showing some upward pressure from tariffs but perhaps not enough to deter the Federal Reserve from cutting interest rates soon.

Follow live coverage of the July consumer price index report, released earlier today. Inflation rose by 2.& in the month as higher tariffs took effect.

Year-over-year, used vehicle prices rose by 4.8%, the seventh month in a row of year-over-year increases, and the biggest one yet. Apparel and footwear are largely imported and tariffed. The CPI for apparel and footwear inched up a hair by 0.07% month-to-month and was down 0.2% year-over-year.

Wall Street expected the impact of Trump tariffs to be a bit more mild in July, after CPI inflation data for June showed a 0.5% jump in core goods prices, excluding autos, which was the biggest increase in two years. Intel INTC is leading the S&P 500 early Tuesday after CEO Lip-Bu Tan got a vote of confidence from President Trump.

Inflation held steady in July as tariffs threatened to drive prices higher, CPI report reveals. But an underlying inflation measure picked up

The surprise PPI reading, driven by the biggest monthly gain in core since 2022, further muddies the central bank's September decision to hold or cut rates in September.

"We expect core CPI to rise by 0.32%M in July (3.04%Y), up from 0.23%M in June," forecast Morgan Stanley. "Our base case remains that most of the tariff-related price effects will materialize over the summer. However, risks are tilted towards a more gradual and persistent upswing in monthly prints through year-end."

Producer prices increased by the most in three years in July, suggesting a broad pickup in inflation was imminent. "This is a kick in the teeth for anyone who thought that tariffs would not impact domestic prices in the United States economy,

Despite a gradual inflation uptrend, the data aligns with Fed projections, keeping a September rate cut in play as the most likely outcome at the next FOMC meeting.