WILLIAM BRANGHAM: Welcome to the "News Hour."

New data show inflation picked up last month, and analysts believe the prices of many goods increased in part because of President Trump's tariffs.

Inflation rose 2.7 percent compared to a year ago and prices increased broadly by three-tenths of a percent last month.

While that's not a huge hike, it is the largest monthly increase since January and it will play into decisions by the Federal Reserve about when and whether to finally cut interest rates.

This comes as the president and his team have ramped up their pressure campaign on Federal Reserve Chair Jerome Powell to lower those rates.

They have also openly speculated about firing him.

Earlier today, the president was asked about Powell and when the two had last spoken.

DONALD TRUMP, President of the United States: I told him he's doing a very bad job.

He's way late.

That's why I call him too late.

Jerome Powell is too late.

He's way late.

Interest rates should be coming down.

We have a very, very successful country.

We should have the lowest interest rate anywhere in the world.And we don't.

Jerome Powell has done a terrible job.

And, frankly, I don't think he could do a worse job.

He's called everything wrong.

WILLIAM BRANGHAM: For more, we are joined again by David Wessel.

He's director of the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution.

David, nice to have you back again.

Before we get to Powell, help us understand these inflation numbers and the price hikes.

Is it because of the tariffs?

DAVID WESSEL, Brookings Institution: Well, when we get these measures of inflation, some things have gone up and some things have gone down.

Airfares are down, for instance, in the last -- in June.

But what analysts are picking up is a number of prices of goods that are imported, apparel, appliances, toys, went up in June.

Women's dresses were up 3.9 percent in June alone.

And so many analysts are saying that this is the beginning of a sign that tariffs are pushing up prices, just as economists had been predicting.

Hasn't happened as quickly as they had anticipated, in part because the tariffs are on again and off again.

WILLIAM BRANGHAM: So how is that information going to be perceived by the Fed as they weigh this issue of when to raise rates?

DAVID WESSEL: Well, the Fed will be meeting later this month, and they have pretty much signaled they're in wait-and-see mode.

This will reinforce the wait-and-see.

The problem with these price numbers is, it's like looking in the rearview mirror.

And the Fed has to look through the windshield.

And if they weren't for the tariffs, I think the Fed probably would be cutting interest rates now.

Inflation has drifted down.

There are a few signs of cracks in the labor market.

But they look ahead and they're afraid that more tariffs will mean more price increases and, even more serious, that businesses and households will expect inflation to remain high.

And that's the one thing they want to avoid.

WILLIAM BRANGHAM: And we should say there are people, even within the Fed, who think we should have cut the rates already.

DAVID WESSEL: Exactly.

Sometimes, the decisions that the Fed makes are pretty straightforward.

When we had the COVID crisis, it was clear they had to lower rates.

When inflation went much higher than they expected, the obvious thing to do was to raise interest rates.

Now they're at the point where they have to make a judgment call.

And at least two members of the seven-member Board of Governors at the Fed -- both happen to be Trump appointees -- have been publicly calling for lower rates.

So I'm sure they will have a discussion.

But the most likely outcome is that they will cut rates maybe in September and October, but not in July.

WILLIAM BRANGHAM: As we just heard, the president keeps ripping into Jay Powell, saying he's done a terrible job and should have been bringing these rates down already.

Has Trump's reasoning about this changed?

I mean, he's asking for a very big rate cut.

DAVID WESSEL: Well, I think the president is trying to make clear that if we have a bad economy later this year or early next, it's Jay Powell's fault, not his.

Presidents often want lower interest rates.

He's not the first president to be frustrated.

George Bush was frustrated.

Harry Truman was frustrated.

Lyndon Johnson was frustrated that the Fed didn't move more quickly.

What is striking in the last few days is the president has been saying they should cut interest rates, not because that's what the economy needs, not to fulfill their mandate of maximum employment and price stability, but instead they should make it cheaper for the government to borrow, make it easier for the government to run deficits.

And that really is unusual.

In fact, the whole reason we have independent central banks is because politicians decided, if they set interest rates, they would tend to set them too low.

WILLIAM BRANGHAM: Right.

DAVID WESSEL: We would get more inflation just to make it easier.

This is the kind of stuff that the leaders of Hungary and Turkey do.

It's very unusual in the United States.

WILLIAM BRANGHAM: On this campaign that the president and the White House have been waging against Jay Powell, they have cited this piece of evidence about an allegedly elaborate renovation of the Fed offices.

And apparently there's some cost overruns and Jay Powell has now said, yes, we should have the inspector general look into this.

The president says this is evidence of financial mismanagement.

Do you think that this renovation issue is going to be the card that the president uses to fire Powell?

DAVID WESSEL: Well, the president has is frustrated that he can't fire Powell because the law says you can only fire the Fed chair for a cause.

So he needs a cause.

And I think some of his aides have been feeling pressure for him.

He said to them, find me a cause.

And they're using this.

Look, the expansion of the Fed, the renovation of their old building is extensive.

And it may very well be over the top.

The fact that there were cost overruns was no secret.

The Wall Street Journal had a story about this on the front page two years ago.

I think it's a very thin argument to say this is cause to justify the Fed share.

I think they seem to be just determined to make Jay Powell's life miserable.

His term is up in May.

He's made it pretty clear he's not quitting.

And if they try and fire him, which the president now says he doesn't want to do, except now maybe he does, Jay Powell has lawyers ready to defend him.

So I think it's more of an annoyance.

But it's alarming because it makes people wonder whether the next Fed chair will be someone who Trump thinks will take orders from him.

And that's not something that we want to see or that the markets want to see.

WILLIAM BRANGHAM: David Wessel, always great to hear from you.

Thank you very much.

DAVID WESSEL: You're welcome.