Fed Interest Rate Hike Odds Diminish as US Inflation Rises Less Than Expected

US inflation increased less than expected in August to a 0.3% gain over the previous month, according to data released by the Commerce Department on Wednesday.

This is lower than the 0.4% gain economists had forecasted, and it suggests that price pressures may be moderating, at least for now.

The Personal Consumption Expenditures Price Index (PCE) rose 3.4% in the 12 months through August, which is in line with the year-over-year estimate of 3.4% in July.

However, despite the lower-than-expected inflation rate, economists are still warning that another interest rate hike by the Federal Reserve this year remains a possibility, particularly if consumer spending continues to surge.