Macro

U.S. consumer prices rose faster in August, with core inflation recording its largest increase in four months as higher energy costs added to price pressures. Rate-hike expectations strengthened, with FedWatch showing the probability rising to 87%. Oil climbed back above $100 a barrel and motor fuels including diesel jumped 9.6% over the week, pushing up inflation expectations. The Federal Reserve faces a more urgent policy trade-off between restoring price stability and supporting economic growth.

A pickup in U.S. inflation in August has reinforced market expectations that the Federal Reserve will raise rates by 25 basis points on Wednesday. Inflation has remained above the Fed’s 2% target, following a jobs report that also surprised to the upside. Rising U.S.-Iran tensions have also helped push oil prices above US$100 a barrel, adding another layer of uncertainty for investors weighing the market outlook.

A surprise rise in UK economic output has reinforced market expectations that the Bank of England could raise interest rates four times over the coming year, with money-market pricing pointing to a move in the benchmark rate from 3.75% to 4.75%. Economists said the economy’s resilience gives hawkish policymakers more justification to push for a rate increase in the fourth quarter. Separately, Brent crude fell more than 2.5% on Friday, slipping back below $105 a barrel.

U.S. inflation accelerated in August after a surge in gasoline prices, while core CPI rose 0.3% month over month, the biggest increase since April. Diesel prices hit record highs, raising transportation costs. Markets are pricing in a more than 80% chance of a Federal Reserve rate hike, and the 10-year Treasury yield climbed to a nearly three-year high.

U.S. core inflation rose more than expected, indicating the disinflation process stalled. After the data, federal funds futures nearly fully priced in a Federal Reserve rate hike next week and suggested a high likelihood of a second increase before year-end. The report said persistent pressures from the Iran war, tariff policy and the data-centre buildout left inflation with little meaningful progress toward the Fed’s target.

U.S. consumer inflation rose 0.4% month-on-month in August, pushing market expectations for a Federal Reserve rate hike higher. The implied probability climbed to 85% from 67%, adding pressure on global equities and lifting bond yields. Brent crude fell 3.3% to $104.04 a barrel, but was still up more than 8% for the week as Middle East tensions supported prices.

A U.S. core CPI reading at a 66-month low triggered sharp volatility across crypto markets. Within 60 minutes of the data release, Bitcoin surged more than 4.5% to break above $79,000. Ethereum rallied more than 8% over the same window, reaching $2,640 for the first time in seven months. Both assets moved higher immediately after the inflation data hit.

U.S. Labor Department data showed the consumer price index rose 0.4% in August and was up 3.4% from a year earlier, unchanged from July. After the inflation report, the dollar strengthened against major currencies including the euro and the Swiss franc, according to the Labor Department. The figures reinforced market expectations that the Federal Reserve will raise interest rates at its meeting next week.

US consumer prices rose 3.4% year on year in August, with gasoline prices jumping 3.9% over the month and accounting for more than a third of the overall increase, Bureau of Labor Statistics data show. Average diesel prices climbed above $6 a gallon for the first time on Friday, a record high. Brent crude has continued trading above $100 a barrel as geopolitical conflict persists.

U.S. consumer prices rose 3.4% year over year in August, slightly above economists’ 3.3% forecast, as gasoline and diesel costs continued to climb. The national average diesel price rose more than 60% from a year earlier to $6.06, while gasoline averaged $4.30. The data arrive ahead of the Federal Reserve’s policy meeting next week, when officials will decide whether to keep raising interest rates.