Inflation held steady in July and ran slightly cooler than expected, increasing the odds of a Federal Reserve rate cut next month.

Goldman Sachs economists in a note estimated that consumers could soon bear up to 67% of tariff costs, up from 22%, thus escalating broader inflation risk. Before the Aug. 14 PPI report, markets were nearly unanimous in pricing a September Fed interest rate cut of up to 0.50%.

A jump in wholesale prices is likely to bolster concerns among Federal Reserve policymakers that rising inflation remains a risk, intensifying debate over the wisdom of a rate cut at their September meeting and leaving the tension between the U.