(NEW YORK) — Inflation data to be released on Thursday will show whether a monthslong cooldown of price increases continued in July.

The fresh data arrives roughly two weeks after the Federal Reserve raised its benchmark interest rate another quarter of a percentage point, reviving its aggressive inflation fight despite a slowdown of price hikes.

Consumer prices rose 3% in June compared to a year ago, marking a significant slowdown from a peak last summer, but remaining at a level one percentage point higher than the Federal Reserve’s target rate.

Economists expect that inflation will have increased to 3.3% in July compared to a year ago, marking an uptick from the preceding month and reversing some of the progress made in slowing price hikes.

Still, an inflation rate of 3.3% would stand well below the peak of 9.1% recorded in June 2022.

Speaking at a press conference in Washington, D.C. late last month, Fed Chair Jerome Powell downplayed the progress achieved so far in reducing inflation.

“Inflation has moderated somewhat since the middle of last year,” Powell said. “Nonetheless, the process of getting inflation back down to 2% has a long way to go.”

The Fed remains open to raising rates again at its next meeting in September, depending on the economic data released over the months prior to that decision, Powell added.

For more than a year, the Federal Reserve has aimed to roll back price increases by slowing down the economy and slashing consumer demand. The approach, however, risks tipping the economy into a recession.

So far, the rate hikes appear to have slowed but not imperiled the nation’s economic growth.

Some key economic indicators have sustained robust performance. A jobs report on Friday showed the labor market cooled, but still grew solidly in July, adding 187,000 jobs.

In June, a major upward revision of government data showed gross domestic product increased at a 2% annualized rate for a three-month period ending in March — a sizable jump from the previous estimate of 1.3%.

The cooldown of inflation alongside resilient economic performance has given rise to optimism among some observers that the U.S. will avert a recession.

The Fed staff no longer forecasts a recession for the U.S., and there is a chance inflation could return to target without high job losses, Powell said in July.

Still, the Fed offered words of caution last month.

“The Committee remains highly attentive to inflation risks,” the Federal Open Market Committee, the Fed’s decision-making body on interest rates, said in a statement.

ABC News’ Zunaira Zaki and Ivan Pereira contributed reporting.

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