Finance

The latest Consumer Price Index report showed annual headline inflation holding steady at 3.4% for August, while core CPI ticked up slightly higher than expected at 0.3% month-over-month. Following the release, market traders aggressively increased the implied probability of a 25 basis point rate increase at the central bank's upcoming meeting to nearly 87%. Investors are increasingly preparing for tighter monetary policy rather than a potential hold.

Treasury yields experienced volatility but remained near long-term highs due to persistent inflation concerns and expected interest rate adjustments. The benchmark 10-year Treasury yield fluctuated just under the 5% threshold after briefly hitting its highest level in three years. Meanwhile, the policy-sensitive 2-year note held firm above 4.6%, reflecting growing consensus that elevated rates will be necessary to stabilize prices.

Brent crude and West Texas Intermediate futures fell roughly 3% on Friday as diplomatic efforts in the Middle East and lowered demand forecasts alleviated short-term supply anxieties. Brent crude slipped back to around $104 per barrel after previously surging near $110 earlier in the week due to escalating shipping tensions. However, energy markets remained significantly higher for the week overall, keeping pressure on broader consumer goods.