Fed Rate Hike Odds Soar as August Inflation Numbers Surprise

The Federal Reserve's interest rate has been stagnant at 3.75% for most of 2026, but recent data suggests inflation remains a concern.

August's Consumer Price Index (CPI) rose by 0.4%, an annual rate of 3.4%. This figure does not include fuel or gas price inflation, which have outpaced the top-line CPI figure.

Citigroup economists attribute great importance to August's inflation numbers, stating 'The fate of the September meeting lies with August CPI.'

Betting markets initially priced in a roughly 50-50 chance of either a rate hike or no action. After August's inflation report, however, the odds of a rate hike spiked above 80%.