Rising wireless bills helped push August inflation higher, nudging the Fed to raise rates

In August, the CPI showed a 5.9% surge in wireless service prices, marking the largest monthly jump in roughly thirty years, according to the Bureau of Labor Statistics. This increase added an estimated 0.1 percentage point to the core CPI, which rose 0.3% versus the 0.2% economists had forecast. The unexpected inflation uptick influenced the Federal Reserve’s decision to raise interest rates, a move highlighted by new Chair Kevin Warsh.

The price hikes stemmed from T-Mobile’s $6 per line increase, AT&T’s up to $20 boost on older plans, and Verizon’s earlier $5 rise on its Unlimited Ultimate plan and add-on services. Industry groups note that carriers are passing billions spent on 5G network expansion and rising regulatory costs onto consumers. The rate hike will affect borrowing costs for mortgages, auto loans and credit cards at a time when many Americans already face a tight housing market and high fuel prices.