# The Fed's hiking cycle just came back to life

> A hotter-than-expected August CPI pushed odds of a rate hike to 85%, and one phone-bill quirk did a third of the damage.
- Title: The Fed's hiking cycle just came back to life · Fortune
- Summary: A hotter-than-expected August CPI pushed odds of a rate hike to 85%, and one phone-bill quirk did a third of the damage. One line in the CPI report, a record…
- Keywords: inflation, federal reserve, cpi, bond yields, markets, Fed's, hiking, cycle, just, came, back, life
- Source: Fortune — https://fortune.com/2026/09/11/inflation-fed-reserve-kevin-warsh
- Author: Eva Roytburg
- Read time: 1 min
- Topics: inflation, federal reserve, cpi, bond yields, markets
## Hikes are back on the table
Oil above $100, surging bond yields, an AI capex boom straining credit, and a hot producer-price report had Wall Street jumpy before the final inflation print.

> The Federal Reserve's hiking cycle suddenly looks alive again.
## Waller set the bar low
With Chair Kevin Warsh staying ambiguous about the next move, Governor Christopher Waller told traders what the trigger looked like.

> it may not take much acceleration in inflation
## CPI cleared it easily
Core consumer prices rose 0.3% in August against expectations of 0.2%. Headline CPI hit 0.4%, with gasoline up 3.9%.
## Markets repriced fast
Odds of a quarter-point hike next week jumped to about 85% from 70%. The 10-year Treasury yield pushed toward 5%, and stocks rallied anyway.
## Main Street is squeezed
Wage growth slowed for a fifth straight month and consumer sentiment sat near a record low, even as markets cheered.

> We haven't seen this type of income squeeze since 2012
## A phone bill moved the Fed
Wireless service prices jumped 5.9%, the largest on record, contributing about a third of core CPI's rise. Strip it out and core inflation rounds to 0.2%, not 0.3%.

> Bull markets don't die of old age, they're killed by the Fed.
## Key takeaway

One line in the CPI report, a record jump in cellphone service prices, accounted for roughly a third of core inflation and may have tipped the Fed toward hiking.