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

Updated on: September 11, 2026 / 10:07 AM EDT / CBS News

Inflation held steady in August, with consumer prices rising 3.4% from a year earlier, matching July's pace but coming in slightly higher than economists had forecast as gasoline costs kept prices elevated.

The hotter-than-expected report increases the likelihood that the Federal Reserve will issue its first interest rate hike in more than three years next week, analysts said on Friday.

Economists polled by FactSet expected inflation to rise in August at an annual rate of 3.3%.

The CPI, a basket of goods and services typically bought by consumers, tracks changes in prices over time.

Inflation has moderated since hitting a three-year high in May, but remains stuck well above the Federal Reserve's 2% goal amid persistently high energy prices caused by the Iran war.

On Friday, the Labor Department said gasoline prices accounted for more than one-third of the monthly increase in the CPI report. Gasoline is up 27.4% from a year ago, although it increased 3.9% in August from the prior month.

Core CPI, which excludes the more volatile energy and food categories, rose at an annual rate of 2.4%, in line with economists' expectations and down…

Original source: https://www.cbsnews.com/moneywatch/