The inflation gauge the Federal Reserve relies on most to decide whether to raise or lower U.S. interest rates is likely to cement a decision by the central bank to stand pat at its next meeting at the end of July.

Some investors had clung to a bit of hope that the Federal Reserve would cut interest rates at its next meeting on July 30. Tuesday's report on inflation brought the chances of that down even further.

The Federal Reserve will likely be able to start cutting short-term borrowing costs by September, traders continued to bet on Tuesday, after a government report showed a widely expected increase in consumer prices last month.