US core inflation surprise pushes Fed-hike odds near 90%

US consumer prices rose 0.4% in August, faster than July but broadly in line with expectations, largely reflecting higher gasoline costs. The more consequential detail was core inflation—prices excluding food and energy—which increased 0.3%, above the 0.2% forecast. That measure matters because it is meant to show whether price pressure is spreading beyond volatile fuel and grocery bills, and the result gave the Federal Reserve less room to wait. Futures markets moved from roughly a 70% chance of a rate increase before the report to about 90% for next week’s meeting, though the decision is still not certain. A hike would mean higher borrowing costs across the economy, from business loans to mortgages and credit cards.