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

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.

The core index that omits energy and food costs also rose by 0.3% in June, but the annual rate ticked up to 2.8% from 2.7% and slightly above forecasts. Personal spending rose by 0.3%, below the 0.4% forecast but still suggesting consumers are willing to continue shopping.