Inflation persisted in August, potentially locking in a Fed interest rate hike
The all-items consumer price index was expected to rise 0.4% in August, with core, excluding food and energy, showing a 0.2% gain, according to the Dow Jones consensus.
TL;DR
- The consumer price index rose 0.4% in August, with the annual increase at 3.4%.
- Core CPI, excluding food and energy, increased by 0.3% monthly and 2.4% annually.
- Traders are now pricing in a nearly 90% chance of a quarter-percentage point interest rate hike by the Federal Reserve next week.
- Energy prices, especially gasoline, were a major driver of the inflation increase.
- Shelter costs and transportation services also contributed to the rising prices.
- Discussions among Fed officials show differing views, with some advocating for patience and others signaling a need for action if inflation doesn't improve.