Story perspectives

August CPI Hits 3.4%, Lifts September Rate-Hike Odds

By Drooid · Sep 11, 2026, 4:55 PM UTC · How we work

Summary

Story summary

U.S. consumer prices rose 3.4% year-over-year in August, spurring rate-hike expectations.
Core CPI increased 0.3% in August, beating the 0.2% forecast.
Gasoline prices jumped 3.9% in August, contributing over one-third of the CPI gain.
CME FedWatch shows a 70%-90% chance of a 25-basis-point hike at the Sep 16 meeting.
President Donald Trump pledged $5,000 checks to adults if Republicans retain House control, raising debt concerns.

History

Historical Context

After the 1973 OPEC oil embargo sparked stagflation, Paul Volcker, appointed Fed chair in 1979, raised the federal funds rate from 11.5% to 17.6% by April 1980, pushing inflation— which peaked at 14.8% in March 1980—into recession under President Jimmy Carter. The August 2023 CPI increase and soaring gasoline prices echo those 1970s oil-shock dynamics, reviving debate over aggressive rate hikes.

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Story summary

U.S. consumer prices rose 3.4% year-over-year in August, spurring rate-hike expectations.
Core CPI increased 0.3% in August, beating the 0.2% forecast.
Gasoline prices jumped 3.9% in August, contributing over one-third of the CPI gain.
CME FedWatch shows a 70%-90% chance of a 25-basis-point hike at the Sep 16 meeting.
President Donald Trump pledged $5,000 checks to adults if Republicans retain House control, raising debt concerns.

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