Fed Faces Pressure to Hike Rates Amid Soaring US Inflation

The US inflation rate accelerated in August due to rising gas prices caused by the conflict in the Middle East. The consumer price index rose 3.4% last month compared to a year ago, with costs jumping 0.4% from July.

Inflation has been stubbornly elevated for over five years, and Friday's report increases pressure on the Federal Reserve to boost its benchmark interest rate next week. This could lead to higher mortgage and auto loan costs in the months ahead.

Federal Reserve officials have signaled that they need to see continuing disinflation before leaving rates where they are. However, Kathy Bostjancic, chief economist at Nationwide, said 'Today's August report did not deliver that.'