August inflation held steady, raising odds of a Fed rate hike
CPI rises as inflation holds firm, with August prices up 0.4% and 3.4% yearly See what the latest report means for Fed rates, markets, and your money
Consumer prices continued to rise in August, with the headline CPI increasing 0.4% from the prior month and 3.4% over the past year, both in line with expectations.
Core inflation, which excludes food and energy, rose 0.3% in August and 2.4% year over year. The reading came in slightly above monthly forecasts and was the last major inflation report before the Federal Reserve's policy meeting next week.
Markets reacted by increasing expectations that the Fed could raise interest rates by a quarter point. Economists pointed to higher gasoline and energy costs as a major driver of the monthly increase, while shelter and transportation costs also moved higher.