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[BUSINESS] · United States · 100 sources

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Federal Reserve faces rate hike pressure following U.S. inflation data

U.S. inflation data for August has intensified market expectations for a Federal Reserve interest rate hike at the upcoming September meeting. The Consumer Price Index (CPI) rose 0.4% month-over-month, while annual headline inflation remained steady at 3.4%. Notably, core CPI, which excludes volatile food and energy prices, rose 0.3% monthly, exceeding economist forecasts of 0.2%.

Rising energy costs have contributed to the inflationary pressure, with gasoline prices climbing 3.9% in August and crude oil prices exceeding $100 per barrel due to Middle East tensions. In response to these figures, the CME FedWatch tool indicates that the probability of a 25-basis-point rate hike has surged to approximately 86-90%.

Financial institutions have adjusted their outlooks accordingly. Goldman Sachs has revised its forecast from a pause to expecting a 25-basis-point increase in September. Similarly, TD Securities now predicts a series of three rate hikes, potentially starting in September and continuing through early 2027, citing persistent inflationary pressures.

Entities

Bank of England · Bureau of Labor Statistics · CME Group · Department of Labor · Donald Trump · European Central Bank · Federal Open Market Committee · Federal Reserve · Goldman Sachs · Iran · Jerome Powell · Kevin Warsh

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Sources

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