US consumer prices rose 3.2% year-on-year in August, the Bureau of Labor Statistics reported Friday, a modest acceleration from July as import tariffs continued to push up the cost of goods. The figure came in just above the 3.1% expected by economists surveyed by Reuters.

Core CPI, which strips out volatile food and energy prices, held steady at 3.1% year-on-year. On a monthly basis, headline prices climbed 0.3%, driven by higher costs for household furnishings, apparel and new vehicles—categories most exposed to import duties imposed over the past year.

The reading arrives one week before the Federal Reserve's policy meeting. The rate-setting Federal Open Market Committee is widely expected to cut its benchmark rate by a quarter point, with traders in CME Group's FedWatch tool pricing a cut as highly probable. The market wager reflects the belief that a softening labour market outweighs the firmer inflation data.

Economists at Goldman Sachs and Bank of America had warned that tariff pass-through would keep goods inflation elevated through autumn. Federal Reserve Chair Jerome Powell has repeatedly characterised the tariff impact as a one-time price-level shift rather than persistent inflation, a distinction that has shaped the central bank's willingness to ease policy.

US equity futures held modest gains after the release, while the yield on the 10-year Treasury note edged higher, reflecting investor confidence that a September cut remained on track despite the uptick in prices.