Lower-than-expected core inflation for July, another in a string of tepid economic numbers, may cause Federal Reserve policymakers to rethink an additional interest rate hike for 2017 if the trend persists, analysts said after the latest Consumer Price Index report was released.

The report from the Bureau of Labor Statistics showed core CPI rose 0.1% in July and 1.7% year over year. Market moves indicated that the odds of an additional Fed rate hike for 2017 fell from nearly 40% to 35% following the release.

"It was a weak report. Expectations were for 0.2% on the month and came in under that," said James Marple, senior economist at TD Bank Group. "This sort of continuation of weak data should at least give them pause."

The Fed has already raised its benchmark interest rate twice in 2017 and a third increase has been widely expected to come in December. But inflation has remained below the central bank's 2% target.

"In our view, this is the fifth disappointment in a row in terms of inflation," said Bricklin Dwyer, senior North America economist at BNP Paribas. "That's a signal that the market's taking away too, which is inflation's not picking up so what's the hurry to hike rates, and we could get far fewer rate hikes than previously expected."

He added that the next rate hike BNP Paribas forecasts is in March.

"We will certainly need to see a run of monthly gains of 0.2 or better in core CPI to get the December rate hike," said Avery Shenfeld, chief economist at CIBC Capital Markets, which currently predicts the Fed will introduce an additional rate hike in December. "The CPI figures are challenging that view, and we'll need to see firmer numbers ahead."

Disappointing inflation figures are unlikely to stop the Fed from announcing plans to unwind its $4.5 trillion balance sheet in September, the analysts said.

"I see them going ahead with balance sheet reduction simply because they can," CIBC's Shenfeld said. "10-year rates … are low enough that the Fed may feel comfortable starting that process knowing that it's not going to do much to the economic picture."

Any economic indicator published between now and the central bank's September meeting would need to show a sharp drop to delay the balance sheet reduction announcement, according to Dwyer at BNP Paribas.

"It would have to be a significant disappointment that showed medium-term weakness, and I think that's very difficult to show with one indicator," Dwyer said. "They're pretty well set in their way."

TD's Marple also expressed skepticism that the central bank would delay its balance sheet reduction plans. "You have economic data continuing to hold up, the economy looking like it's growing above trend," he noted. "In terms of the real data, even if inflation's weak, they haven't abandoned the notion that economic improvement and the economy running above its potential should eventually put upward pressure on inflation."