The Federal Reserve's preferred inflation gauge showed that inflationary pressures remained elevated in July, as the central bank mulls an interest rate cut at its meeting next month.

The Commerce Department on Friday reported that the personal consumption expenditures (PCE) index rose 0.2% from a month ago in July and remained at 2.6% on a year-over-year basis, in line with the expectations of economists polled by LSEG.

Core PCE, which excludes volatile food and energy prices, was up 0.3% on a monthly basis and 2.9% from a year ago, both in line with economists' estimates.

Federal Reserve policymakers are focusing on the PCE headline figure as they try to bring inflation back to their long-run target of 2%, though they view core data as a better indicator of inflation. Headline PCE remained flat at 2.6% in July from the prior month, while core PCE ticked up from 2.8% to 2.9%.

Prices for goods were up 0.5% in July from the same month a year ago, with durable goods prices up 1.1% and nondurable goods up just 0.2%.

Services prices were 3.6% higher in July when compared with last year, up slightly from the 3.5% reading in June.

This is a developing story. Please check back for updates.