U.S. annual inflation held at 3.4% in August, matching the market consensus and remaining unchanged from July, the Bureau of Labor Statistics said Friday.

On the month, prices rose 0.4% as expected, after a 0.1% increase in July, with gasoline up 3.9% and accounting for over a third of the monthly increase.

Core inflation, which strips out food and energy, eased to 2.4% year-over-year from 2.5% and matched estimates. Yet, the monthly reading came in at 0.3% against the 0.2% expected, accelerating from July.

The print lands with fed funds futures pricing roughly a 69% chance of a rate hike at next week's FOMC meeting, after Brent crude's surge above $105 and a 30-year Treasury yield at 2007 levels pushed markets to increase hike bets.

This is a developing story…