Fed Faces Growing Pressure for Rate Hike Amid Strong Inflation Data

The Federal Reserve is facing mounting pressure to raise interest rates at its September 15-16 meeting, following stronger-than-expected U.S. inflation data and a robust economy.

Core CPI rose 0.3% month over month in August, exceeding economists' forecasts, with the data confirming that despite five years of efforts to bring price growth under control, inflationary pressures remain elevated.

The market reaction has been swift, with the probability of a rate hike at the September meeting rising from around 70% to more than 85%, and investors assigning a greater probability to a second increase by December.