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U.S. inflation rose at a slower than anticipated rate in June, although so-called “core” prices remained elevated, suggesting that the Federal Reserve is likely to raise interest rates further at its upcoming policy meeting.

The Bureau of Labor Statistics’ closely watched consumer price index increased by 3.0% annually, down from 4.0% in May. Economists had expected a rise of 3.1%.

It was the lowest level in more than two years and represented a steep deceleration from the mark of 9.1% reached last June.

On a month-on-month basis, the reading grew by 0.2%, up from 0.1% in the prior month. Estimates had called for 0.3%.

Meanwhile, core CPI, which strips out more volatile items like food and energy, cooled to 4.8% yearly and 0.2% monthly. Expectations were for both to decline to 5.0% and 0.3%.

Despite the headline number inching ever closer to the Fed’s 2% target, sticky core figures have fueled speculation that the central bank will raise interest rates later this month after pushing pause on its hiking cycle in June. According to’s Fed Rate Monitor Tool, there is a more than 91% chance that the central bank will roll out a quarter-point jump in borrowing costs at its July gathering.