The Federal Reserve’s preferred inflation gauge rose more than expected in July, maintaining pressure on U.S. central bankers to tackle accelerating prices when they meet in mid-September.

Bureau of Economic Analysis estimates published Wednesday show the personal consumption expenditures (PCE) price index increased 0.2% last month, reversing the 0.1% decline posted in June.

Annual growth in PCE registered 3.7%, matching June levels but well above the Fed’s stated 2% target for annual inflation. Economists polled by Reuters, Dow Jones and Bloomberg had expected just 0.1% monthly growth and an annual rise of 3.6%.

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Consensus estimates matched core measures of the PCE index, however, which strips out volatile food and energy prices. Core PCE rose 0.2% monthly and 3.3% annually in July, higher than June’s 0.1% gain in core inflation but level on a year-over-year basis.

Wednesday’s inflation print is the last major economic release Fed policymakers will have in hand as they meet at the end of this week in Jackson Hole, Wyo., for an annual economic symposium.

The gathering includes a highly anticipated speech by Kevin Warsh on Friday morning, his first since becoming Fed chair in late May.

Warsh has faced rising pressure to tackle inflation that has been above the Fed’s target threshold for more than five years. That pressure has grown more acute as inflation has accelerated in recent months amid Iran war impacts, widening federal spending deficits and a multiyear surge in artificial intelligence expenditures.

But the hotter-than-expected PCE reading comes on the heels of an as-expected consumer price index reading for July. Paired with a negative jobs report for last month, it had weakened expectations that Warsh and his fellow policymakers would act decisively by raising the federal funds rate in September.

With Warsh’s Jackson Hole speech on deck, market-implied odds that the Fed will hold rates steady in September had increased only slightly Wednesday morning from prior-day levels around 60%, according to CME FedWatch.

The benchmark federal funds rate has been in its current target range of 3.5% to 3.75% since the Fed last lowered it by 0.25% at its December 2025 meeting.