David Merrell, founder of TBH Advisors, speaks with Kiplinger’s Dan Burrows about August CPI data and what it means for inflation. “Inflation continues to be sticky. The surge in headline CPI, which includes food and energy prices, from 0.2% to 0.6% month-over-month and 3.7% from 3.2% year-over-year, is concerning. Observers tend to discount headline CPI as the food and energy components are seen as more volatile and not indicative of structural inflation or core CPI. However, these are real costs to the consumer and will pressure the central bank to hold rates steady or even consider additional interest rate hikes to achieve their desired 2% inflation target. Proving this point, odds makers now show nearly a 47% chance of a Fed rate hike in November. That’s up from 41% before the news,” explains Merrell.