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Macro EconomyMediumUpdated×2•Originally published 4 September 2026•Updated 4 September 2026•
2 min read

US August CPI Inflation Forecast at 3.4% Year on Year Before Fed Meeting

Key Facts

1The annual CPI inflation forecast is 3.4% for August 2026, with the report due September 11 at 8:30 a.m. Eastern Time.
2July CPI rose 0.1% monthly and 3.4% annually, versus 0.2% monthly and 2.5% annually for core CPI.
3July PCE rose 0.2% monthly and 3.7% annually, versus 0.2% monthly and 3.3% annually for core PCE and a 2% Fed target.
4The FOMC left its target range unchanged at 3.5%-3.75% by a 9-3 vote, with 3 members preferring a 25-basis-point increase.
5The next FOMC meeting is scheduled for September 15-16, 2026.

The US consumer price index, or CPI, for August is due on September 11, 2026, at 8:30 a.m. Eastern Time, ahead of the Federal Open Market Committee's September 15-16 meeting. The Associated Press reported an annual inflation forecast of 3.4%, the same rate as in July.

The latest official reading showed CPI rising 0.1% month over month and 3.4% year over year in July. Core CPI, which excludes food and energy, increased 0.2% for the month and 2.5% over 12 months, establishing the baseline for the August report.

The energy index fell 1.5% in July but remained 14.7% above its year-earlier level. Gasoline prices declined 2.9% for the month and rose 24.6% annually. Energy movements can therefore have a pronounced effect on headline CPI, while the core measure offers a clearer view of less volatile price pressure.

The Federal Reserve uses the personal consumption expenditures, or PCE, price index as its preferred inflation gauge. It rose 0.2% monthly and 3.7% annually in July, compared with 0.2% monthly and 3.3% annually for core PCE, leaving both annual readings above the Fed's 2% target.

The FOMC left its target range unchanged at 3.5%-3.75% in July by a 9-3 vote. The 3 dissenters preferred a 25-basis-point increase, highlighting disagreement over the required degree of restraint without determining the September decision.

Fed Chair Kevin Warsh said inflation remained above the 2% target and that the summer readings had not demonstrated meaningful improvement in the underlying trend. Christopher Waller said August inflation would heavily influence his decision: he is prepared to support leaving rates unchanged if progress toward 2% continues, but would consider an interest-rate increase if inflation comes in hot. The September 11 report will therefore be a key input to the September 15-16 FOMC decision.