Leading economists react to June’s Consumer Price Index report, which showed that inflation was largely in line with expectations, while speculating on what this means for Federal Reserve policy and growing tariff-related pressures.

The next major U.S. inflation report is set to arrive on Tuesday in the form of the consumer-price index for June, and will inform investors as to whether President Donald Trump’s tariff wars with other countries have had a sizable impact on inflation.

Both the S&P 500 (.SPX) and Nasdaq (.IXIC) - and by extension, MSCI's world equities index (.MIWD00000PUS) - retreated from record peaks after traders shaved back bets of U.S. rate cuts this year as prices rose for things such as coffee and couches, while staying steady for tariff-exempted (for now) items such as cars.

The consumer price index for June is expected to show that Trump tariffs began to nudge inflation higher last month.

Consumer prices in the New York area, including Long Island, rose at a faster pace in June than in May, driven in part by higher costs for child care, housing and groceries, such as meat and eggs.

Rating agency Crisil, in its latest research report, said that the consumer price index (CPI)-based inflation is expected to average four per cent this financial year, as compared to 4.6 per cent last fiscal.

Tech led US stocks on Tuesday as a key consumer inflation print showed inflation accelerated in June, big banks kicked off earnings season, and Nvidia was set to receive a green light for trade with China from the Trump administration.

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