US Inflation Rate Hits 3.4% as Fed Weighs Rate Hike

The US inflation rate rose to 3.4 percent in August, exceeding the Federal Reserve's 2 percent target due to higher oil and gas prices resulting from the war with Iran.

Fed Chairman Kevin Warsh has assured policymakers will bring inflation down to the 2 percent goal, prompting experts to warn of a potential quarter-point rate hike this week as a move to control inflation.

A rate hike would increase borrowing costs for consumers and businesses, making it more expensive to borrow money. This could lead to higher interest rates on credit cards, car loans, and personal loans, but may also mean higher returns on high-yield savings accounts.