Oil's upward price movement is making the Federal Reserve’s path toward a 2% inflation target more difficult.

The crude market's rise is likely to have lifted overall inflation last month. And while core inflation — which strips out food and energy costs — has been on a downward trend, economists worry that higher energy prices could increase input costs for goods and services, leading companies to raise prices on everything from airfares to furniture.

"I’d say the rise in oil prices since late June/early July has clearly put upward pressure on gasoline prices and will lead to a large boost in the August headline CPI [Consumer Price Index]," Omair Sharif, president of Inflation Insights, tells Yahoo Finance.

He added, “You may see higher fuel surcharges seep into higher prices for food, for food services, and a variety of goods that are moved by truck — for example furniture, appliances. You can also see higher jet fuel costs make their way into higher airfares."

August's Consumer Price Index report, slated for release Wednesday, is expected to show prices increased 0.5% from the prior month, an acceleration from July's 0.2%. Year-over-year inflation is expected to jump 3.6% versus 3.2% in July.

Core CPI is expected to stay unchanged but could surprise to the upside because of the higher transportation fuel costs Sharif referenced.

Earlier this week, United Airlines, Southwest, and Alaska Air all warned of higher fuel costs in the third quarter.

Since mid-July, "jet fuel prices have climbed over 20%,” noted United Airlines in an 8-K filing on Wednesday.

Why oil prices are rising

West Texas Intermediate (CL=F) and Brent crude futures (BZ=F) have rallied more than 25% since late June. Output cuts are putting a squeeze on the oil market, despite China’s slower-than-expected economic recovery and increased production output by US producers.

Earlier this week Saudi Arabia announced an extension of its unilateral production cuts for the next three months. Russia also reduced its exports by 300,000 barrels per day through year-end. These cuts are in addition to OPEC+ reductions that started at the end of last year.

Wall Street analysts are starting to talk about $100 oil if momentum in the oil market continues.

In July, the Federal Reserve raised interest rates for the 11th time since March 2022, in what officials hinted could be the first of two rate hikes considered for the rest of the year.

The Fed is expected to hold rates steady when it meets on Sept. 19 and 20 as it continues to watch inflation data and make sure it's still cooling.