Fed Set for Rate Hike as Inflation Pressures Persist

The upcoming Federal Reserve meeting on September 15-16 is expected to bring a rate hike, as inflation data released in August showed price pressures remaining stubbornly high.

The Consumer Price Index rose 0.4% in August from July and 3.4% over the past year, with core CPI increasing 0.3% during the month, faster than the 0.2% increase economists had expected.

These figures have strengthened the case for policymakers who argue that the Fed should raise interest rates rather than wait for inflation to cool further.

Traders in federal funds futures now see roughly an 85% to 90% probability of a quarter-percentage-point rate increase at next week's meeting, according to the CME Group's FedWatch gauge.