US CPI report to show 3.4% annual inflation, key for Fed rate decision

September 11, 2026 at 12:45 AM2 min

This digest was compiled by AI from multiple sources — links to the originals are below.

The US Labor Department will release August consumer price data on September 11, with economists expecting a 3.4% annual rise and a 0.4% monthly gain. The report is seen as pivotal for the Federal Reserve's September 16 rate decision, where traders assign 72% odds to a 25-basis-point hike. The data arrives even as oil prices have surged past $100 a barrel and producer prices remained hot last month.

Key Facts

Economists surveyed by Bloomberg expect August CPI to rise 0.4% month-over-month, up from 0.1% in July.
Annual headline inflation is projected to hold at 3.4%, while core inflation is expected to ease to 2.4% year-over-year.
Traders see roughly 72% odds of a 25-basis-point rate hike at the Fed's September 16 meeting, according to CME FedWatch.
Oil prices have surged past $100 a barrel, adding to inflation concerns ahead of the CPI release.
The US economy added 162,000 jobs in August, exceeding expectations and easing fears that another rate hike could weaken the labor market.

Inflation Expectations

Economists surveyed by Bloomberg expect consumer prices to rise 0.4% in August from July, accelerating from the prior month's 0.1% gain. Annual headline inflation is forecast to remain at 3.4%, while core inflation, excluding food and energy, is expected to dip to 2.4% from 2.5%. Both headline and core inflation have declined since peaking in May at 4.2% and 2.9%, respectively, but remain above the Federal Reserve's 2% target. Bank of America economist Stephen Juneau wrote that the report is unlikely to alter the message of limited inflation progress and should support a rate hike at the September meeting.

Fed Rate Decision

Fed Chairman Kevin Warsh said last month that inflation is still too high, a signal many market participants read as keeping a September rate hike on the table. Governor Christopher Waller and New York Fed President John Williams have indicated they would likely vote to hold rates steady if inflation continues to move lower. Traders assign roughly 72% odds to a 25-basis-point increase at the September 16 meeting, according to CME FedWatch. Oil prices above $100 a barrel and hot producer price data have reinforced expectations of tighter policy.

Market Signals

The US added 162,000 jobs in August, beating forecasts and reducing concerns that higher rates would immediately weaken the labor market. Realtor.com senior economist Jake Krimmel noted that August gas prices are part of why headline inflation remains well above core. Mortgage rates hit 2026 highs again, a trend Krimmel said looks poised to continue.