Fed Hike Odds Jump to 85% as Core Inflation Accelerates
The recent inflation report had a mixed impact on the Federal Reserve's decision-making process. The consumer price index increased by 0.4% in August, with gasoline being the primary contributor to the headline increase. However, core inflation accelerated, which kept Governor Christopher Waller's conditional case for a rate hike in play.
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The policy tension lay within the inflation report itself. Annual core inflation eased, while its latest monthly pace picked up. This combination made it difficult for policymakers to determine their next move.