August CPI report drops today as Fed rate hike odds climb to 70%

The Bureau of Labor Statistics is releasing the August Consumer Price Index report at 8:30 a.m. ET on September 11, marking the last significant inflation checkpoint before the Federal Reserve convenes on September 15-16. Economists expect the numbers to tell a story of rekindled price pressures, driven largely by a gasoline rebound that’s about to complicate the Fed’s calculus. The consensus forecast calls for a 0.4% month-over-month increase in headline CPI, a sharp acceleration from July’s modest 0.1% gain. On a year-over-year basis, that would place headline inflation somewhere in the 3.3% to 3.4% range, roughly in line with July’s 3.4% annual reading. What economists are watching Core CPI, which strips out food and energy to reveal the underlying inflation trend, is expected to tick up 0.2% month-over-month. That would translate to a 2.4% year-over-year pace, actually a slight deceleration from July’s 2.5% annual core reading. Average gasoline prices climbed to $4.192 per gallon in August, up from $4.064 in July. Energy prices, after a period of relative calm, have reasserted themselves as an inflationary force. The rate hike question Following recent producer price index data...