WASHINGTON (Reuters) -U.S. consumer prices likely picked up in June, potentially marking the start of a long-anticipated, tariff-induced increase in inflation that has left the Federal Reserve cautious about resuming its interest rate cuts.

The Consumer Price Index report from the Labor Department on Tuesday is expected to show a rebound in gasoline prices and higher costs for some tariff-sensitive goods last month. Inflation readings from February through May were on the soft side, leading to demands by President Donald Trump for the U.S. central bank to lower borrowing costs. 

But with retailers like Walmart warning of price increases, most economists expect price pressures to begin building up beginning this summer and stretching through the end of the year. They said inflation has been slow to respond to Trump's sweeping import duties because businesses were still selling stock accumulated before the tariffs came into effect.

Business surveys have pointed to inflation rising this summer. Trump last week announced higher tariffs would come into effect on August 1 on imports from a range of countries, including Mexico, Japan, Canada and Brazil, as well as the European Union.

"The June CPI report is likely to show inflation beginning to strengthen again, albeit not enough to alarm Fed officials at this juncture," said Sarah House, a senior economist at Wells Fargo. "While inventory front-running has mitigated the need to raise goods prices, it will become increasingly difficult for businesses to absorb higher import duties as pre-tariff stockpiles dwindle."

The CPI likely increased 0.3% last month after edging up 0.1% in May, a Reuters survey of economists showed. That would be the largest gain since January, with gasoline prices likely rebounding after four straight monthly declines. Economists expect mild food price increases, thanks to a moderation in the cost of eggs as an avian flu outbreak abates.

In the 12 months through June, the CPI is forecast to advance 2.7% in June after rising by 2.4% in May.

WARMER CORE INFLATION 

Excluding the volatile food and energy components, the CPI is estimated to have risen 0.3% after edging up 0.1% in May. That reading also would be the biggest advance in the so-called core CPI since January, with the lift likely coming from a number of items that are exposed to tariffs, including furniture and recreation goods.

"Anecdotal reports suggest that tariff-related price hikes began to finally grow in frequency in June, but I expect the bulk of the impact to come in July and August," said Stephen Stanley, chief U.S. economist at Santander U.S. Capital Markets.  

Solid price increases for goods, however, could be somewhat offset by moderate rises in services costs. Soft demand has limited price increases for services-related categories like air fares as well as hotel and motel rooms. 

In the 12 months through June, core CPI inflation is estimated to have increased 3.0% after rising 2.8% for three straight months.

The Fed tracks different inflation measures for its 2% target. The central bank is expected to leave its benchmark overnight interest rate in the 4.25%-4.50% range at the end of a policy meeting later this month. The minutes of the central bank's June 17-18 meeting, which were published last week, showed only "a couple" of officials said they felt rates could fall as soon as the July 29-30 meeting.

"And even if slowing services prices are not quite weak enough to keep overall core CPI subdued, only modest services inflation should be an encouraging sign that higher goods prices are not leading to broad-based inflationary pressures," said Veronica Clark, an economist at Citigroup. "This should keep Fed officials comfortable lowering rates in September even if there is some stronger inflation data in the next few months."

Goldman Sachs is forecasting monthly core CPI inflation increases of between 0.3% and 0.4% over the next few months, reflecting tariff-related increases in the prices of consumer electronics, autos and apparel. The investment bank expects limited near-term impact on core services inflation.