STORY: U.S. shoppers may be starting to feel the effects of Donald Trump’s tariffs.

Figures for June out Tuesday (July 15) show consumer prices rising at an annual rate of about 3.5% - significantly higher than May.

Economists say that fits with forecasts that inflation would pick up in the summer as firmns run out of stock acquired before tariffs kicked in.

Prices in some categories jumped much more, with audio-visual gear now up over 11% from last year.

That’s a big change for a product category that has generally seen steady or falling prices for a long time.

Rises like that could be one-off shocks that won’t be repeated, but the Federal Reserve will be watching the data very closely.

The central bank wants to know exactly what impact tariffs are having before deciding when or whether to cut rates.

This cautious approach has Donald Trump very unhappy with Fed chair Jerome Powell:

“We have a bad Fed chairman, really bad. If he would lower the rates... if he would lower the rates - and I try to be nice to the guy, it doesn't help, he's like a knucklehead. No he's a knucklehead.”

Trump on Tuesday said inflation was “low”, and repeated his call for rates to fall sharply.

At other times he’s seemed to float the idea of ousting Powell early.

That alarms many investors, who fear that could undermine the central bank’s independence and credibility.

Now Tuesday’s figures are seen as cutting the chances of a rate move at the Fed’s next meeting in September.

One market model says the likelihood of a cut is now fifty-fifty.

But on Tuesday White House Press Secretary Karoline Leavitt focused on figures for core inflation, which excludes volatile food and energy prices.

That increased less than expected, which Leavitt said proved that Trump was stabilizing price rises.