Tuesday’s inflation report put the kibosh on the notion that, just maybe, the Federal Reserve policy makers might decide against increasing interest rates by another three-quarters of a percentage point next week.
The Labor Department reported that consumer prices rose by 0.1% in August from July, putting them 8.3% above their year-earlier level. Economists polled by The Wall Street Journal had forecast a 0.1% decline. Worse, core prices, which exclude food and energy items in an effort to better capture inflation’s trend, jumped 0.6% from July for an on-the-year gain of 6.3%. Economists were looking for a 0.3% gain.