The Consumer Price Index, or CPI, jumped 0.6 percent in August after it increased by 0.2 percent in July, the U.S. Bureau of Labor Statistics reported on Wednesday. Over the last year, inflation increased 3.7 percent, with high gas prices a key reason behind the jump, accounting for over half of the increase.
The news, which shows inflation way higher than the Federal Reserve's target of 2 percent, suggests that when policymakers meet next week, they are likely to retain their high interest rates stance, with implications for mortgage rates that could stay high for the foreseeable future as a result. "The shelter index was the largest factor in the monthly increase in the index for all items less food and energy," BLS said.
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