Fed seen likely to raise rates next week after inflation report

Hotter-than-expected inflation readings will give little comfort to the majority of U.S. central bankers who have been counting on price pressures easing on their own, and set the table for an interest-rate hike next week.

U.S. consumer price inflation excluding energy and food, a key measure of underlying inflation, rose 0.3% last month from the previous month, the Bureau of Labor Statistics reported, more than the 0.2% that economists had anticipated. From a year earlier, core CPI rose 2.4%, while overall consumer inflation measured 3.4%.

Coupled with a stronger-than-expected August producer price index released on Thursday and oil prices that have soared above $100 a barrel amid renewed hostilities in the Middle East, the latest data suggest inflation by the Fed's targeted measure, above the target 2% for 5-1/2 years, is again moving in the wrong direction.