US consumer prices accelerate in August, pushing Fed closer to rate hike

U.S. consumer prices saw an acceleration in August, with a key measure of underlying inflation recording its largest increase in four months. This development reinforces expectations that the Federal Reserve will likely raise interest rates in its upcoming meeting. The Labor Department's Consumer Price Index report followed strong readings in the Producer Price Index, suggesting that PCE inflation, which the Fed tracks for its 2% target, also picked up. Financial markets initially priced in a 91% chance of a quarter-point rate hike, settling at 87% by the time of reporting.