Fed Rate Hike Looms as US Consumer Inflation Report Due

The US is bracing for a consumer inflation report on Friday that could pave the way for the Federal Reserve's first interest rate hike in over three years. The war with Iran has driven energy costs higher, and data this week showed an uptick in wholesale inflation.

Analysts believe that a steady or higher inflation figure, particularly when volatile components are excluded, could nudge the Fed towards raising interest rates as policymakers meet next week.

Navy Federal Credit Union chief economist Heather Long told AFP, 'Friday's report will seal the deal for a Fed rate hike in September. If the data comes in in line with expectations, or certainly any higher than expectations, a hike is a definite.'

KPMG chief economist Diane Swonk anticipates that the Fed is likely to raise short-term interest rates before year-end despite 'intensifying political pressure to cut.'