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,

Traders are paring bets on near-term rate cuts, and Treasury bond yields are edging higher, amid stubborn underlying inflation pressures tied to the president’s myriad tariffs. Trump himself said through his social media account that borrowing costs should be “3 points” lower. “One Trillion Dollars a year would be saved,” he declared.

A fresh report on Tuesday marked two consecutive months of rising inflation. Consumer prices rose 2.7% in June compared to a year ago, marking a notable surge of price increases as President Donald Trump's tariff policy took hold and some retailers warned they may pass some of the tax burden onto shoppers.

A new inflation report released this morning shows the country’s 12-month inflation rate has gone up for a second consecutive month. Economists have been warning about the impact of President Trump’s tariff threats.

Inflation accelerated in June as President Trump’s tariffs started to leave a bigger imprint on the economy, keeping the Federal Reserve on track to hold interest rates steady when policymakers next meet this month.

Tariffs contributed modestly to the rise of inflation last month, analysts told ABC News, citing the price hikes in product categories made up primarily of imports. But, they added, overall price increases owed largely to a rise in housing and food products with little connection to tariffs.

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.

New data showing price increases last month could foreshadow even higher costs if the president imposes steep tariffs on Aug. 1.

The U.S. Bureau of Labor Statistics announced Wednesday that wholesale prices didn't change in June, making predictions of tariff-boosted inflation murky.

But while the underlying narrative remains that there will be a negative impact on the economy going forward, there is some hope that it will not be quite as bad as feared, according to a new survey of economists.