US inflation too high for Fed
U.S. consumer prices rose significantly in August, up 0.4% from the previous month.
Bernd Weidensteiner
Commerzbank Economic Research
09/11/2026
This was not only due to noticeably higher gasoline prices. Even more important is the excessive underlying price pressure, as evidenced by the core inflation rate—excluding energy and food—which came in at 0.3%, exceeding expectations. The Federal Reserve has already signaled that it could raise interest rates if the inflation trend does not ease quickly. Now it needs to take action. At its meeting on Wednesday, we now expect the Fed to raise the target range for the Fed Funds rate by 25 basis points.
The data
U.S. consumer prices rose 0.4% in August compared with the previous month. Excluding energy and food, they rose 0.3%, a tenth of a percentage point more than we and the consensus had expected. In year-over-year terms, the headline rate—which covers all goods and services—remained at 3.4%, while the core rate edged down from 2.5% to 2.4%.
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