U.S. inflation decelerated in August, but remained higher than what economists had expected, a sign that the U.S. Federal Reserve will stay aggressive in raising interest rates.
Woodside said. “We believe the terminal rate will at least reach the 4% threshold this cycle.”
"The latter is the biggest concern, fueled by an acceleration in rental inflation that looks like it’s got quite a bit further to go," said Brian Coulton, chief economist at Fitch Ratings.
On a month-over-month basis, inflation rose 0.1% from July, when inflation remained unchanged, which many economists and politicians saw as a huge success.
Economists at FactSet had forecasted a 8.1% increase, and so the number was slightly higher than expectations.
Core CPI, which strips out more volatile food and energy prices, rose 0.6%, a much larger increase than in July.