The dollar rose by the most in nearly four weeks, recovering about half of the losses triggered by Treasury Secretary Scott Bessent’s surprise move last week to prop up the bond market, as inflation data bolstered bets that the Federal Reserve will start raising interest rates by year end.

The Bloomberg Dollar Spot Index climbed as much as 0.3%, tracking Treasury yields higher, before paring the advance. The moves came after the personal consumption expenditures price index, the Fed’s favored gauge of inflation, continued to rise at a 3.7% annual pace in July, nearly twice the central bank’s target.

The data reinforced expectations that the Fed may tighten monetary policy sooner than previously anticipated. The dollar’s gains were led by strength against major peers, with the index recouping about half of the losses from the prior week.

Market participants are now closely watching upcoming Fed communications for further signals on the timing of potential rate hikes. The PCE reading remains well above the Fed’s 2% target, keeping pressure on policymakers to act.