US Inflation Rises 3.4% in August, Fed Rate Hike Odds Decrease

US inflation rose at an annual rate of 3.4% in August, lower than economists' expectations of 3.7%, according to data released by the Commerce Department on Wednesday.

This development may prompt markets to further reduce the odds of another interest rate hike from the Federal Reserve next month.

The monthly inflation rate climbed 0.3% in August, up from 0.1% in July, indicating that prices are still running hot.

Excluding volatile energy and food categories, core prices rose 3% in August from a year ago, lower than expected.