Inflation Surges as Gas Prices Soar, Fed Rate Hike Looms
The latest inflation report has revealed that US inflation accelerated last month due to spiking oil prices and rising interest rates, putting pressure on the Federal Reserve to boost its benchmark interest rate next week.
Gasoline prices jumped 3.9% from July to August, leaving gas prices more than 27% higher than a year earlier. The nationwide average cost of a gallon of gas is now $4.30, up 7% from last month.
The consumer price index rose 3.4% in the past year, with costs jumping 0.4% from July, quadrupling the 0.1% registered in the previous month. Excluding food and energy categories, core prices were 2.4% higher in August than a year ago.
Federal Reserve Chair Kevin Warsh has signaled that he would need to see continuing disinflation to leave rates where they are, but 'today's report did not deliver that,' said Kathy Bostjancic, chief economist at Nationwide.