Fed Faces Pressure to Raise Rates Amid Surging US Inflation

Fed Chairman Kevin Warsh faces intense pressure to raise interest rates at next week's policy meeting after a highly anticipated inflation report showed US consumer prices marched higher last month. The core consumer price index, which excludes food and energy costs, increased 0.3% from a month earlier in August.

The underlying inflation rise bolsters the argument already embraced by several policymakers that the Fed must act to curb price pressures after more than five years of elevated inflation. 'For the Fed, it is time to put up or shut up,' Omair Sharif, president and founder of Inflation Insights LLC, wrote in a note to clients.

Investors have made their expectations clear, with the probability of a hike at the Fed's Sept. 15-16 gathering jumping to above 85%, up from about 70% on Thursday. They also expect a second rate hike by December.