The Federal Reserve’s key inflation gauge ran just slightly above expectations in June, raising additional doubts about how quickly the central bank will be able to lower interest rates. The stronger-than-expected result complicates the Fed’s path to rate cuts. President Donald Trump late Thursday announced steeper levies for dozens of countries. He also stuck to his Friday deadline for imposing higher tariffs on Canada, while giving a one-week delay to other trading partners that had received letters.

Inflation picked up in June, as measured by the Federal Reserve's preferred gauge, reflecting the continued price pressures that make the central bank cautious about cutting interest rates.

In the 12 months through June, the PCE index rose by 2.6%. That was up from 2.4% in May, and slightly faster than the 2.5% estimated by forecasters polled by The Wall Street Journal.

On a core basis, which excludes volatile food and energy prices, the PCE increased 2.8%, also a tad faster than expected. 

The rates are well above the 2% trend the Fed targets.

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8:30 a.m.: U.S. Employment Report
9:45 a.m.: US Manufacturing PMI
10 a.m.: University of Michigan Survey of Consumers - final
10 a.m.: ISM Report On Business Manufacturing PMI
10 a.m.: Construction Spending - Construction Put in Place
11 a.m.: Global Manufacturing PMI
4 p.m.: Domestic Auto Industry Sales

10 a.m.: Manufacturers' Shipments, Inventories & Orders (M3)
10 a.m.: Employment Trends Index

The next four key U.S. data prints--two CPI reports and two payroll prints for July and August--starting with the July payroll print on Friday, will be watched closely to assess Federal Reserve rate-cut chances in September, say BNP Paribas analysts in a note. Investors have so far believed in a 'worst of four' framework, they say. That means that any weak report out of the coming four prints would be enough for a rate cut in September. "We think that complacent assessment could change after the July FOMC meeting." On Wednesday, the Fed left interest rates on hold, in line with expectations. — Emese Bartha

The Bank of England could signal a slowdown in the pace of quantitative tightening starting from October at its meeting next week, Oxford Economics' Edward Allenby says in a note. Quantitative tightening, or QT, is the process through which central banks wind down holdings of bonds purchased during periods of quantitative easing. The BOE will likely opt for a slower pace of QT due to rising U.K. government-bond yields and increased volatility in this asset class, Allenby says. The QT target for the 12 months starting in October is expected to fall to between 75 billion pounds ($99 billion) and 80 billion pounds from the current pace of 100 billion pounds, he says. — Miriam Mukuru

Canada's payrolls report for May, combined with a positive revision in April, indicate a bit more momentum in the labor market, says Royce Mendes, managing director at Desjardins Capital Markets. Still, Mendes says softness pervades in the job market, based on a decline in job vacancies. The data show job vacancies fell to their lowest level since October, 2017, and declined nearly 16% from a year ago. "The economic slack remains evident across a number of indicators," says Mendes, adding wage growth is also slowing. — Paul Vieira

• Major Wall Street banks have modestly lifted their oil-price forecasts for this year and next, but lingering uncertainty over U.S. tariffs and rising OPEC+ output continue to cloud the outlook.
• The AI arms race is accelerating as the major tech companies add to their already gargantuan levels of spending. The bets are paying off for investors, but not for all employees.
• Initial jobless claims rose by only 1,000 to 218,000 in the week ended July 26, the Labor Department said Thursday. Claims remain well below the 237,000 average in May and June. The gain was less than expected. Economists polled by The Wall Street Journal had estimated new claims would rise by 5,000 to 222,000. (MarketWatch)
• President Trump’s sudden turn against Russia has been met with skepticism from officials in his administration and European capitals who say he has done little since returning to office to punish the Kremlin for failing to end its war on Ukraine.
• The Swiss government said it is analyzing the situation after U.S. President Trump revealed a steeper 39% tariff on imports from the country. (Dow Jones Newswires)
• Australian house prices posted a sixth consecutive monthly rise in July, supported by ongoing speculation that the Reserve Bank of Australia will deliver further interest-rate cuts through the second half of the year. (DJN)
• Lawmakers in both houses of Congress introduced legislation targeting China on Thursday, a reminder of Capitol Hill’s deep-seated desire to punish Beijing over human rights even as President Trump gives priority to a trade deal.
• A private gauge of China’s manufacturing activity returned to contractionary territory in July, as softening new business growth led factories to scale back production.
• South Korea’s export growth was stronger than expected in July, driven largely by strong demand for high-performance computing chips amid the artificial-intelligence boom.
• Sentiment among Southeast Asian manufacturers fell to its lowest level since the pandemic, with confidence slipping to a five-year low amid trade policy uncertainty and subdued demand.
• President Trump promised Africa that trade would replace aid when he dismantled America’s foreign-assistance programs soon after taking office this year. But here in one of the world’s poorest countries, his administration is slashing both.

WSJ Pro Central Banking brings you central banking news, analysis and insights from WSJ’s global team of reporters and editors. This newsletter was compiled by news associate Roshan Fernandez in New York. Send your tips, suggestions and feedback to roshan.fernandez@wsj.com.