Fed Expected to Hike Rates Next Week as Inflation Remains Hot at 3.4%

Inflation remained steady but elevated in August, bolstering expectations of an interest rate hike at next week's meeting of the Federal Open Market Committee (FOMC).

The U.S. Labor Department's Consumer Price Index (CPI) data released Friday revealed that headline inflation measuring the change in overall prices rose 0.4% month over month in August and stayed flat at 3.4% over the last 12 months.

Core inflation, which strips out volatile food and energy costs—and which is watched especially closely by both the Fed and the markets—cooled to an annual rate of 2.4%, down from 2.5% in July, continuing its downward trajectory.

Today's CPI report is the final major economic indicator that will inform policymakers' decision on rates as they prepare for the Sept. 15-16 FOMC meeting.

This is a developing story. Please check back for updates.