August CPI Data Raises Stakes for Fed's Critical Rate Decision Next Week
Consumer prices rose 3.4% year-over-year in August, matching expectations but complicating the Federal Reserve's path ahead of its September 16 meeting.
Headline inflation jumped 0.4% month-over-month, driven largely by a 3.9% spike in gas prices amid the ongoing Iran conflict. Core inflation, which excludes food and energy, ran hotter than forecast at 0.3% monthly.
The report follows a surprisingly strong August jobs count of 162,000, pushing rate-hike odds above 60%. Fed Chair Kevin Warsh has signaled he isn't ready to declare victory on inflation, leaving markets split between a hold and a quarter-point hike.
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