US inflation remained stubbornly hot in August, adding to pressure on the Federal Reserve to hike interest rates next week.
The consumer price index rose 3.4% year-over-year, according to the Bureau of Labor Statistics, jumping 0.4% from the month prior. Gasoline drove more than one-third of that monthly increase, as the Iran war continues to roil global oil markets.
The CPI, along with a stronger-than-expected jobs report this month, has traders of the Fed funds future rate betting on a rate hike: Chances of a 0.25-point hike rose by more than 13 percentage points Friday morning, according to CME Fedwatch. “The Federal Reserve’s hands are tied,” a chief investment officer told The Wall Street Journal. “A rate hike next week is all but assured.”