The recent consumer price index release showed inflation increased 8.3% over the last year.

Traders expect the Federal Reserve to raise interest rates another 75 basis points in its September meeting.

Rising interest rates can benefit banks by boosting their net interest income.

Over the past year, inflation has remained stubbornly high, wreaking havoc for consumers and investors alike. Economists hoped August would bring better news, but it didn't.

Earlier this week, the U.S. Bureau of Labor Statistics released its August data for the consumer price index, which measures the changes in the costs of consumer goods. The release showed that prices were up 8.3% on an annual basis, with higher food and housing costs offsetting lower energy prices.

Now investors look to the Federal Reserve, which has been aggressively fighting inflation with its primary tool: interest rate increases. When the Fed raised rates by 75 basis points in June, it was its largest rate hike in 28 years. The Fed raised rates another 75 basis points in July, and investors expect a similar increase during its meeting next week. While rising rates hurt most companies by raising the cost of borrowing, bank stocks benefit. Here's why.