CIBC Research reviews the US August inflation report.

"A hotter than expected core reaffirms the odds of a Fed hike at the next FOMC meeting. Although total CPI came in line with consensus at 0.4% m/m in August, core CPI surprised on the upside at 0.3% (consensus: 0.2%). The acceleration on headline was driven largely by a rebound in gasoline prices as expected. The core measure, rose 0.3% after a 0.2% monthly pace in July. Although core goods posted a modest 0.1% gain, shelter accelerated due to a rebound of lodging away from home (hotels) after two consecutive monthly declines. Public transportation services also posted solid increase for the month due to a small pick up in air fare, which could have been impacted by the higher fuel prices. The annual pace of total CPI held steady at 3.4% from July to August, while core CPI eased slightly from 2.5% to 2.4% (saved by rounding, unrounded was 2.446%)," CIBC notes.

"With core CPI running hotter than consensus on a monthly basis, and accelerated from July's pace, we now think this would tip most FOMC members over in favour of a hike in the upcoming FOMC meeting next week," CIBC adds.