The risk is that a hotter-than-expected June inflation report — one that Fed Chair Jerome Powell recently called among the most important for assessing the impact of tariffs — could slow the pace at which the central bank lowers interest rates. Importantly, that could also throw a wrench into the stock market’s record-setting rally.

Some economists think inflation will hit 3.5% in this morning’s report, coming in above the Bank of England’s forecast. We look at what to expect.

Consumer inflation likely accelerated in June, as the Trump administration's tariffs start to push up prices. The Labor Department's consumer-price index for last month is due at 8:30 a.m. ET. Year-over-year inflation likely picked up to 2.