Fed Rate Hike Odds Surge as Inflation Rises Above Target
The Consumer Price Index (CPI) rose 0.4% in August, exceeding expectations, and inflation remains above the Federal Reserve's target of 2%. The core figure, which excludes volatile food and energy prices, increased by 0.3%, beating forecasts of a 0.2% rise.
The overall CPI was up 3.4% on an annual basis, in line with economists' forecasts and the same rate as July. National average gasoline prices remain above $4 a gallon, contributing to the higher inflation rate.
Renewed hostilities with Iran have sent oil futures back above $100 per barrel, pushing diesel prices to a record high of $6 a gallon on Friday. The Federal Reserve's interest-rate decision next week is all but certain to be a quarter-point hike, according to CME FedWatch, which tracks Fed Funds futures.