U.S. Consumer Price Index data has delivered mixed signals just ahead of the Federal Reserve's highly anticipated meeting next week. While annual core inflation cooled to 2.4%, monthly price increases accelerated.
Headline inflation rose 0.4% month-over-month, up from 0.1%, while core inflation climbed 0.3%, up from 0.2%. Overall inflation remains well above the Fed's 2% target, standing at 3.4% year-over-year.
Gasoline prices jumped 3.9%, with inflationary pressure also spreading to shelter, airfares, and vehicles. With oil near $100** per barrel and **diesel at a record $6 a gallon, September could bring further strain on household budgets.
These factors have strengthened the case for a rate hike at Wednesday's Fed meeting. Wall Street is now pricing in a 90% probability of a rate hike, according to Axios.