U.S. inflation rises again and keeps the pressure on Fed

The Federal Reserve's preferred inflation gauge accelerated in August, a reminder that price pressures remain firmly in place despite earlier expectations that they would cool. The reading helps explain the central bank's decision to raise interest rates earlier this month for the first time in three years, signaling that policymakers see persistent inflation as a bigger near-term risk than slowing growth.

For markets, the key question is how the data shapes the Fed's next steps. A hotter inflation print can reinforce expectations of further tightening, which typically lifts bond yields and the dollar while weighing on rate-sensitive sectors such as technology and real estate. Equities may also react to any hint that the Fed could move faster than investors anticipate.

What to watch: upcoming inflation and employment reports, Fed officials' public comments, and whether price pressures broaden beyond volatile categories. Those signals will shape how aggressively the central bank acts — and how markets price that path.