Oil Prices, Inflation Fuel Fed Rate Hike Fears

The Federal Reserve is likely to raise interest rates next week due to high oil prices and hot US inflation data. The August US consumer inflation rate was unchanged at 3.4 percent, which is well above the Fed's two percent target.

Cresset Capital Management's Jack Ablin noted that investors are resigned to the fact that the Fed will raise rates next week. However, he described the inflation figure as 'a little frosting on an otherwise rancid cake'.

The recent escalation in the US-Iran war has driven up oil prices, with Brent crude touching $110 per barrel before falling back after a forecast downgrade by the International Energy Agency.