Core Inflation Surprise Sends Fed Hike Odds Soaring to 90%

U.S. consumer prices rose by 0.4% in August and were 3.4% higher than a year earlier, matching market consensus.

The surprise was underneath: core CPI, which excludes food and energy, increased 0.3% month over month versus the 0.2% investors had expected.

This was not an inflation blowout, but it was hot enough in the measure most relevant to the Federal Reserve debate to make a September rate increase the clear market base case.