Investors are betting harder on a September Federal Reserve interest rate cut after last month's mild inflation bump, which indicated the pass-through from President Donald Trump's sweeping import duties to goods prices has so far been limited.

Inflation was broadly in line with expectations as tariffs continue to be largely absorbed within US corporate profit margins.

Futures traders were pricing in a higher than 90% probability of a September rate cut after Tuesday's inflation report, according to data from CME Group's FedWatch tool. Chances of a cut stood at more than 91% recently,