Fed Rate Hikes Gain Momentum as US Inflation Hits 3.4 Percent

The US Consumer Price Index rose 0.4 percent in August, exceeding expectations, while underlying price pressures increased more than expected.

The increase was driven by a sharp rise in gasoline prices, which jumped 3.9 percent after declining for two consecutive months and accounted for more than a third of August's monthly CPI increase.

Economists warned that record diesel prices could result in higher supermarket prices because nearly all goods are transported by road.

The Federal Reserve is likely to raise interest rates next week, with financial markets pricing in a roughly 91 percent probability after the report, up from about 72 percent on September 10.