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Inflation Surprise Portends More Rate Hikes from Fed
Investors see a 100% likelihood that the Federal Reserve will announce an increase of at least 75 basis points in the federal funds rate next week, CNBC reported Tuesday, citing CME Group data. That’s following the U.S. Bureau of Labor Statistics’ report showing that inflation rose faster than expected in August.
The consumer price index rose 0.1% in August and 8.3% year over year. Excluding volatile food and energy costs, the CPI rose 0.6% from July and 6.3% from the same month in 2021.
Economists had expected headline inflation to fall 0.1% and core to increase 0.3%, according to Dow Jones estimates. The respective year-over-year forecasts were for 8% and 6% gains.
“Right now I think the Fed is going to be looking at this with a lot of concern,” Nomura economist Rob Dent told CNBC. “This is no good news across this report.”
- ◦Financing
- ◦Economy
