US consumer prices accelerated in August as gasoline rebounded after two months
of declines, boosting market bets on a Fed rate hike next week. The Labor
Department’s BLS said CPI rose 0.4% MoM in August after a 0.1% gain in July;
consumer inflation was up 3.4% YoY over the 12 months to August, unchanged from
July. Thursday’s data showed August PPI rose, with several key subcomponents
that feed into PCE inflation, and last week’s strong August jobs report added to
tightening expectations. After the CPI release, markets priced roughly a 90%
probability of a Fed rate increase next week.
