US August CPI Matches Expectations as Fed Rate Decision Looms

The US Consumer Price Index (CPI) for August has come in as expected, showing steady year-on-year inflation at 3.4% and month-on-month growth to 0.4% from 0.1%. Core inflation, which excludes volatile food and energy prices, eased slightly to 2.4% year-on-year but firmed to 0.3% month-over-month.

The numbers have set the stage for a closely watched Federal Reserve interest rate decision later this week. According to Reuters polling of 93 desks, 65 expect the Fed to hold rates steady while 28 anticipate a hike. Market pricing suggests almost even odds, with futures prices pointing towards a 3.75-4.00% target range.

The upcoming week will also see key economic events from Canada and the UK, including Canadian CPI data on Monday, followed by UK jobs and inflation numbers. The Bank of England's decision is due on Thursday, while the Bank of Japan policy call concludes the week on Friday.