AI Generated Image

Inflation stayed hot in August with annual pace of 3.4%, raising the odds of a Fed hike

CBS News • September 11, 2026 • business

Key Points:

Inflation in August rose 3.4% year-over-year, matching July's rate but slightly above economists' 3.3% forecast, driven largely by rising gasoline prices.
Gasoline prices increased 27.4% annually and 3.9% monthly in August, accounting for over one-third of the monthly CPI rise, while core CPI excluding energy and food rose 2.4% annually and 0.3% monthly.
The hotter-than-expected inflation data has increased the probability of a Federal Reserve interest rate hike next week to 90%, up from 70% the previous day.
Energy prices, especially diesel reaching a record $6.06 per gallon, continue to surge due to escalating tensions in the Iran war, potentially causing broader inflationary pressures across the economy.
Experts warn that recent CPI data does not fully capture the latest energy price spikes, suggesting inflation may remain elevated and complicate the Fed's efforts to reach its 2% target soon.

Trending Business