Gas Prices Fuel US Inflation as Fed Rate Hike Looms

U.S. inflation accelerated in August due to rising gas prices, which spiked following renewed fighting in the Middle East.

The consumer price index rose 3.4% last month compared with a year ago, and quickened month-to-month as costs jumped 0.4% from July, quadrupling the 0.1% registered in the previous month.

Gasoline prices are not the only rising cost: prices for appliances, car repairs, and wireless phone services also jumped last month.

Federal Reserve officials face pressure to boost their benchmark interest rate next week, which could lift mortgage and auto loan costs in the months ahead. Chair Kevin Warsh has signaled that a rate hike is likely necessary if disinflation doesn't continue.