US inflation was firmer than expected in August, likely keeping the Federal Reserve on track for a third-straight 75 basis-point interest-rate hike.
The consumer price index increased 0.1% from July, after no change in the prior month, Labor Department data showed on Tuesday. From a year earlier, prices climbed 8.3%, a slight deceleration.
So-called core CPI, which strips out the more volatile food and energy components, advanced 0.6% from July and 6.3% from a year ago. All measures came in above forecasts. Shelter, food, and medical care were among the largest contributors to price growth.
The acceleration in inflation points to a stubbornly high cost of living for Americans, despite some relief at the gas pump. Price pressures are still historically elevated and widespread, pointing to a long road ahead toward the Fed’s inflation target.
The great Guinness shortage has lessons for Diageo
Ireland has won the corporation tax game for now, but will that last?
Corkman leading €11bn development of Battersea Power Station in London: ‘We’ve created a place to live, work and play’
Elf doors, carriage rides and boat cruises: Christmas in Ireland’s five-star hotels
Chairman Jerome Powell said last week that the central bank will act “forthrightly to achieve price stability, and some policy makers voiced support for another historically large rate hike. Officials have said their decision next week will be based on the “totality of the economic data they have on hand, which also illustrates a strong labor market and weakening consumer spending.
Following the data, Treasury yields surged, while S&P 500 index futures slid and the dollar rose. Traders boosted bets that the Fed will raise interest rates by three-quarters of a percentage point, now seeing such an outcome as locked in.
Before the report, several Wall Street forecasters including Evercore and Deutsche Bank lifted their projections to call for a 75 basis-point move. - Bloomberg
