August Inflation Rises, Fueling Expectations of Fed Rate Hike

August inflation climbs to 3.4%, with core reading above expectations, raising chances of a Fed rate hike.

September 11, 2026 One Min Read

POLICY WIRE — Washington, United States — The U.S. inflation rate increased by 0.4% in August, pushing the annualized figure to 3.4%, matching July’s level, according to new data from the Bureau of Labor Statistics.

The core inflation measure, which excludes food and energy costs, rose by 0.3%—slightly higher than the 0.2% forecast by economists. This uptick has raised expectations that the Federal Reserve may consider another interest rate increase at its upcoming meeting.

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Gasoline prices surged 3.9% in August, contributing more than a third of the monthly increase. Food costs also climbed by 2.1%, while shelter expenses rose by 0.3%. Meanwhile, some areas saw price declines, including vehicle insurance and medical care. Despite these mixed signals, economists remain concerned about ongoing inflation pressures.

Reporting by Policy-Wire (PW)

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