U.S. Inflation Rises in August
Inflation in the United States accelerated in August, driven by rising energy prices, with the Consumer Price Index increasing by 0.4% on a monthly basis and 3.4% year-over-year. One of the main contributing factors was the 3.9% rise in gasoline prices, resulting from the decline in oil prices due to the war with Iran, alongside increased costs for diesel and energy overall. This has led markets to increasingly wager on the Federal Reserve raising interest rates, with a 90% probability at its upcoming meeting, potentially impacting consumers—especially given the rise in Treasury and mortgage bond yields. The latest data reinforce ongoing inflation pressures, despite a strong labor market, thereby intensifying the case for interest rate hikes to contain inflation.
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