Inflation continued to recede in August, paving the way for the Federal Reserve to lower interest rates for the first time since early 2020 at their meeting next week.

But signs of stubbornness lingered under the surface, which caused investors to ramp up their bets that central bankers will lower borrowing costs by a quarter-point from their current 5.33 percent, not the larger half-point that some had previously seen as possible.

The overall Consumer Price Index climbed 2.5 percent in August from a year earlier, a notably cooler pace of inflation than July’s 2.9 percent and down sharply from a peak of 9.1 percent back in 2022.

But the number that was getting attention from Wall Street on Wednesday was a monthly “core” measure. That gauge shows how much prices picked up between July and August after stripping out food and fuel prices, both of which can be volatile. And it ticked up to 0.3 percent, slightly more than economists had expected.

The details made that move important: It came as a measure of housing prices proved surprisingly stubborn. Shelter costs make up a big chunk of overall inflation, so if they are not cooling as expected, they could prevent the pace of price increases from returning fully to the Fed’s goal.

Still, that complication was not enough to change the overall narrative. Inflation has been gradually slowing for some time, paving the way for the Fed to shift its policy stance as officials try to strike a careful balance in which they fully defeat rapid price increases without tanking the economy in the process.