US inflation rose 3.7% year-on-year in August, exceeding forecasts, as petrol prices rose. On a monthly basis, the headline rate of consumer prices increased 0.6%.
The US Federal Reserve’s next FOMC meeting is scheduled for September 19-20. Fed Chair Jerome Powell said in August another interest rate hike may be needed to curb inflation within the 2% target.
According to the CME FedWatch Tool, there is a 93% chance that interest rates will increase by 525-550 basis points. Furthermore, there is a 7% chance that interest rates will increase by 550-575 basis after the September FOMC meeting.
However, according to economists polled by Reuters, the Fed could still keep interest rates unchanged for the time being. The economists suggested that the Fed may wait until April-June 2024 or later before cutting rates.