Story perspectives

Fed set for 0.25-point September rate hike after CPI

By Drooid · Sep 12, 2026, 9:58 PM UTC · How we work

Summary

Fed Hikes Rates

Federal Reserve expected to raise policy rate by 0.25 percentage point at its September 16 meeting.
Core CPI rose 0.3% in August, surpassing the 0.2% forecast.
Overall consumer inflation was 3.4% year-over-year in August.
Fed Chair Kevin Warsh said the Fed will act if inflation does not move toward 2%.
Market pricing shows an 85.6%–90% chance of the hike after the data.

Summary

Prices Surge

Diesel fuel reached a record $6.06 per gallon, 63% higher than a year ago.
National average gasoline rose to $4.30 per gallon, up $1.10 from a year earlier.
Apple increased prices of older iPhone models by $100, citing higher chip production costs.
Computer software and accessories posted a 25.4% annual price increase, the largest on record.
Airline fares jumped nearly 25% year-over-year, adding to travel expense pressures.

History

Historical Context

In response to double-digit inflation that hit 13.5 % in 1980, Fed Chairman Paul Volcker raised the federal funds rate to a 20 % peak in June 1981, driving unemployment to 10.8 % in 1982. The sharp disinflation lowered CPI below 3 % by 1983, a precedent today’s Fed official Kevin Warsh cites while weighing a 0.25-point hike.

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Fed Hikes Rates

Federal Reserve expected to raise policy rate by 0.25 percentage point at its September 16 meeting.
Core CPI rose 0.3% in August, surpassing the 0.2% forecast.
Overall consumer inflation was 3.4% year-over-year in August.
Fed Chair Kevin Warsh said the Fed will act if inflation does not move toward 2%.
Market pricing shows an 85.6%–90% chance of the hike after the data.

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