Inflation persisted in August, potentially locking in a Fed interest rate hike

Produce is offered for sale at a grocery store on Sept. 10, 2026 in Chicago, Illinois. Scott Olson | Getty ImagesPrices for a wide swath of goods and services continued to climb in August, according to a report Friday that raises the specter of a Federal Reserve interest rate hike next week.The consumer price index rose a seasonally adjusted 0.4% for the month, putting the 12-month increase at 3.4%, the Bureau of Labor Statistics reported Friday. Both readings were in line with the Dow Jones consensus.However, stripping out volatile food and energy prices, core CPI posted a 0.3% monthly gain, or 0.1 percentage point higher than forecast. The core annual rate came in at 2.4%, in line with the estimate. The report is the final major inflation indicator the Fed will see before it holds its policy meeting next week, concluding Wednesday with a vote on its key interest rate.Traders responded to the numbers by ramping up bets that the Federal Open Market Committee will increase its benchmark interest rate by a quarter percentage point. Odds for a hike jumped to about 90%, according to the CME Group's FedWatch tracker of fed funds futures prices.Energy propelled the headline number higher...