US inflation exceeded forecasts in August after fuel prices rose, but underlying price pressures eased.
The headline rate of consumer prices rose 3.7 per cent year on year, according to the Bureau of Labor Statistics, up from 3.2 per cent in July and higher than consensus forecasts of 3.6 per cent. On a monthly basis, prices increased 0.6 per cent.
More than half of the monthly increase was driven by a jump in petrol prices.
However, the annual rate of core inflation, which strips out volatile food and energy costs and is closely followed by central banks, fell to 4.3 per cent from 4.7 per cent in July.
The Fed has lifted interest rates 11 times since March 2022 in an attempt to bring inflation back towards its 2 per cent target.