August Core Inflation Surges, Cementing Rate Hike Expectations

August's core inflation rate rose more than expected, increasing pressure on the Federal Reserve to raise interest rates at its upcoming meeting.

The Consumer Price Index (CPI) rose 0.4% in August, matching forecasts and accelerating from July's 0.1% gain.

However, the core measure - which strips out volatile food and energy costs - climbed 0.3% from the prior month, exceeding the 0.2% consensus estimate.

This hotter-than-expected monthly core figure has significant implications for the Fed's decision-making process, with Governor Christopher Waller stating that he would support keeping rates unchanged if inflation continued trending toward the central bank's 2% target, but would consider a hike if August data 'comes in hot.'