Sticky US inflation pushes Fed rate hike odds to 85%
Economists polled by Reuters had looked for a 0.2 percent monthly core print.
The Fed’s preferred gauge, the personal consumption expenditures price index, sat at 3.7 percent in July 2026 and has run above the 2 percent target for more than five years, the Financial Times reported.
Odds of a quarter-point increase to the federal funds target range, held at 3.50 to 3.75 percent all year, climbed to roughly 85 percent from about 70 percent before the release, according to CME Group’s FedWatch tool cited by Reuters.
“There’s no guarantee that the Fed will hike next week, but it’s hard to see how the central bank can justify leaving rates on hold,” Chris Zaccarelli, chief investment officer at Northlight Asset Management, told CNBC.
Gasoline prices jumped 3.9 percent on the month, accounting for more than a third of the headline gain, while the broader energy index rose 2.1 percent and stood 16.3 percent higher than a year earlier, CNBC reported from the BLS data.
