Consumer prices rose 0.1 percent in July as gasoline retreated, the Labor Department said Wednesday, cooling the annual inflation rate to 3.4 percent from 3.5 percent in June and giving the Federal Reserve a second data point in a week to weigh before its mid-September rate meeting.

The reading kept the year-over-year pace of price increases 0.2 percentage point above the 3.2 percent rate of wage growth logged in the July jobs report, and left the Federal Open Market Committee caught between two camps: officials pointing to Friday's weak payrolls print as a reason to stand pat, and hawks including Cleveland Fed President Beth Hammack, who called Tuesday for the central bank to raise rates.

What moved

The Bureau of Labor Statistics said shelter costs rose 0.1 percent in July, accounting for "roughly two-thirds of the monthly all items increase." Food prices also rose 0.1 percent, with the index for food away from home up 0.3 percent. Gasoline prices fell 2.9 percent for the month.

Oil prices climbed Wednesday. Brent crude touched $90 a barrel and West Texas Intermediate rose to nearly $84 as the war with Iran continues, NBC News reported, and the national average pump price returned to $4.03 a gallon.

Core CPI, which strips out food and energy, rose 0.2 percent for the month and 2.5 percent from a year earlier, matching a rate last seen in January and February.

The hawk case

Hammack made her position public on LinkedIn a day before the print. "Now is the time to act," she wrote. "The longer we wait to take action to bring inflation back to our 2 percent objective, the more challenging it will be to bring it back down and the more expensive it will be for the American people."

The Fed has held its policy rate unchanged since the war with Iran began, even as central banks in Europe and Japan have tightened. Chair Kevin Warsh has said the bank remains committed to bringing inflation back to its 2 percent target, which it has missed for years.

The other view

Fox Business framed the July report as evidence that price growth remains elevated enough for the Fed to consider a hike next month, citing Circle Squared Alternative Investments founder Jeff Sica's analysis of what hotter CPI and producer-price readings could mean for the central bank's rate path. The network also flagged Hammack's view that multiple rate hikes may be needed to tame inflation.

The FOMC's next interest-rate decision is due in mid-September.