US Inflation Beats Expectations, Solidifying Rate Hike Probability

The US inflation rate rose by 0.3% in August, beating consensus expectations of a 0.2% increase.

This follows a stronger-than-expected jobs report for August, which further supports the case for a Federal Reserve interest rate hike this week.

However, annual core inflation eased to 2.4% year-over-year from 2.5%, sustaining the disinflationary trend.

The Fed's policy meeting is set for September 15-16, and with the latest data pointing towards a rate hike, Chairman Warsh faces pressure to raise rates despite the potential risks of it being seen as a one-off move rather than the start of a multiple hiking cycle.