National Economic Council Director Kevin Hassett, a top economic advisor to Trump, on Monday rebuked concerns about tariff-related inflation. The Fed, Hassett told CNBC, has been "very, very wrong" in its assessment of a potential resurgence of price increases.

The U.S. is expected on Tuesday to report that rising costs for imported goods lifted overall consumer prices in June, kicking off what might be several months at least of such increases and giving Federal Reserve officials highly awaited data on whether the Trump administration's tariffs are boosting inflation.

The acceleration in the CPI reading is bad news for President Donald Trump, who is pushing for the Federal Reserve to cut interest rates and stimulate the economy. The Fed's Board of Governors has so far resisted cutting rates to see how Trump's tariffs affect prices, concerned that summer would see a spike in inflation.

Consumer prices rose 2.7% in June from a year earlier, the Labor Department said Tuesday, up from an annual increase of 2.4% in May.

The June data still reflects only the initial impact of Mr. Trump’s global trade war. Economists expect price pressures to intensify over the coming months, especially if new tariffs the president has threatened against the European Union and a host of other countries in recent days are imposed on Aug. 1 as planned.

A busy week ahead for investors will see inflation data, the debate about the Fed's next move, and the start of second quarter earnings season all come into focus after a flurry of trade activity last week.

Minutes from the Fed’s June policy meeting tease at a looming split over whether and when officials will resume rate cuts.

The emerging divide among Federal Reserve officials over the outlook for interest rates is being driven largely by differing expectations for how tariffs might affect inflation, a record of policymakers’ most recent meeting showed.