(Reuters) -Cooler-than-expected inflation last month deepened conviction in financial markets Wednesday that the Federal Reserve will start cutting interest-rate cuts by September rather than waiting longer.

After a government report showed the core consumer price index - a measure of underlying inflation - rose just 0.1% in May after a 0.2% rise in April, traders of short-term interest-rate futures priced in a 70% chance of a quarter-point reduction in the Fed policy rate by September, compared with 57% earlier.