August CPI report could spark the Fed's first rate hike in over 3 years
Summary
The Federal Reserve will review the August Consumer Price Index (CPI) report to decide whether to raise interest rates for the first time in over three years. Inflation has eased recently but rising energy prices and other costs may influence the Fed's decision at its meeting on September 16.Key Facts
- The August CPI report will be released on Friday at 8:30 a.m. ET.
- Economists expect inflation rose 3.3% annually in August, down from 4.2% in May.
- The Fed’s main tool to control inflation is raising borrowing costs through interest rate hikes.
- Nearly half of Fed policymakers supported a rate hike later this year at the last meeting.
- U.S. oil prices rose above $100 a barrel due to conflicts in the Middle East.
- Inflation before consumer prices (producer price index) increased 5.4% in August.
- Interest rates have been steady since December 2025, but a hike in September is likely.
- Core inflation, excluding volatile food and energy prices, is closely watched by the Fed.
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