Inflation ticks up in August, complicating Fed’s rate cut path

Inflation edged higher in August, government data showed Thursday, as investors looked for signs of how much President Trump’s tariffs are filtering into consumer prices and what that means for how aggressively the Federal Reserve will cut interest rates.

The latest data from the Bureau of Labor Statistics showed that the Consumer Price Index (CPI) increased 2.9% annually in August, a rise from July’s 2.7% increase and on par with economist expectations.

Month over month, prices rose 0.4% compared to July’s 0.2% increase, an uptick compared to economists’ expectations of a 0.3% monthly gain. The rise was driven by stickier gasoline prices and firmer food inflation.

Core inflation, which strips out volatile food and energy, rose 3.1% year over year in August, unchanged from July and in line with estimates. On a monthly basis, core prices climbed 0.3%, matching July’s increase, which was the strongest monthly rise in six months.

This is a breaking news report and will be updated.

Allie Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.

Click here for the latest stock market news and in-depth analysis, including events that move stocks

Read the latest financial and business news from Yahoo Finance