Core inflation rose 0.3% month-on-month and 2.6% year-on-year versus the expected 2.5%, while the previous reading was 2.4%. Higher energy costs are starting to feed into the overall price level. This carries the risk that energy prices will filter through the economy and push inflation up, which would force the Fed to accelerate its rate-hike plan. The probability of a rate hike in October doubled today to 44%.
