Economists can draw a line between new higher prices and tariffs.

I'm David Brancaccio in Los Angeles.

Consumer inflation is moving the wrong way.

There's news this morning, the Consumer Price Index, rose by a bit more than expected in August up 4 tenths of a percent.

That means prices went up 2.9 percent in a year versus 2.7 percent,

according to the previous reading. Let's get this analyzed. Diane Swank is chief economist at the Audit Tax and Advisory firm, KPMG. Good morning.

Good morning. I mean, this looks like prices are running a little hot to me.

How do you read it as a professional?

Well, we are seeing prices accelerate, and that is really hard.

We're seeing prices that are the most sensitive to tariffs go up the most.

We saw durable goods prices go up.

Those are those big-ticket durable goods items and most sensitive to the first rounds of tariffs.

Those rose at their fastest pace since November of 2022.

That was back when we were still dealing with the worst of the pandemic-induced inflation.

Now, our central bankers are meeting next week, and the betting had been definitely – they're going to lower interest rates a little bit in middle of next week.

Do you think this inflation news might change their calculation in any way?

It doesn't change their calculation, but it keeps the debate within the Fed heated.

So we could see a quarter point cut with dissents in both directions, Some dissenting for a more aggressive half percent cut

and others dissenting in favor of no move whatsoever by the Federal Reserve.

Well, we'll try to have a ringside seat next week for all this. Diane Swank, Chief Economist, KPMG. Thank you.

Thank you.

Thank you. Time for the marketplace economic pulse, views of the economy from a range of perspectives.

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