An expected Fed rate hike on Wednesday offered some relief to stock investors that the central bank was working to contain inflation.

The 12-month rate of inflation as of August 2026 is 3.4%, according to the Bureau of Labor Statistics (BLS). Energy inflation spiked to 16.9% as the status of the Strait of Hormuz remains uncertain. Core inflation, which excludes energy and food, was 2.4%.

Economists expect the rate to have risen above 3% in the year to August, largely due to fuel prices. The Bank of England aims to keep it at 2%.

The FOMC said the decision to raise interest rates was directly tied to speeding up the process of cooling inflation. "Inflation remains elevated. Today’s policy action will support a timelier return to the committee’s 2% goal,

The details in the latest Consumer Price Index report could compel the Federal Reserve to raise interest rates.

The number matched analyst expectations and was even with July’s 3.4%.

Inflation remained stubbornly high in August, largely on the back of higher energy prices amid the Iran war, economists said.

The report comes at a pivotal moment for the Federal Reserve, which is scheduled to meet next week to decide whether to hike interest rates.