CPI Report Suggests Federal Reserve May Raise Interest Rates Next Week

The August Consumer Price Index (CPI) report from the U.S. Bureau of Labor Statistics showed a slight increase in inflation, matching July's pace at an annual rate of 3.4%. This is higher than economists' expectations of 3.3%.

The CPI measures changes in prices over time for goods and services typically bought by consumers. The index for gasoline rose 3.9 percent in August, accounting for over one third of the monthly all items increase.

The Federal Reserve's interest rate decision, set for September 16, could be influenced by this report. Fed Chairman Kevin Warsh indicated that reining in inflation is a priority, and this report may provide insight into whether they will raise interest rates next week.