US consumer price inflation in August could be the deciding piece of data for Federal Reserve policymakers in their deliberations on September 15 and 16 over whether to raise interest rates.
On Friday, the Bureau of Labor Statistics is expected to report that headline consumer price inflation was 3.4 per cent in August, year over year, the same rate as July, according to economists polled by Reuters. The core measure, which strips out volatile food and energy prices, is expected to slow to 2.4 per cent from 2.5 per cent.
Analysts at Barclays said the headline figure was likely to have been driven by an increase in oil prices during the month, as the US war in Iran continues to disrupt global flows. But the Fed is likely to pay closer attention to the core reading, as an external oil shock is outside the central bank’s scope of influence.