Fed Hesitates on Rate Hike as Inflation Report Looms

The inflation report is set to be released on Friday, and it's shaping up to be one of the most consequential in years. The Federal Reserve is considering whether to lift its short-term interest rate next week, with some officials saying the report could swing them either way.

Oil prices have spiked again due to renewed combat in the Middle East, while longer-term interest rates jumped on Thursday partly because of fears of higher inflation, pushing mortgage borrowing costs higher. The year-over-year figure for core prices is projected to be 2.4%, down slightly from 2.5% in July.

Despite the cooling in core prices, renewed fighting in the Middle East has pushed up energy costs, with the nationwide average cost of a gallon of gas on Thursday jumping 7% from a month ago to $4.28. Gas prices on Labor Day were at a record high for that date.