August CPI Holds at 3.4% as Gasoline Drives Monthly Gain

The all-items Consumer Price Index rose 3.4 percent for the 12 months ending August 2026, the same rate as for the 12 months ending July 2026, the U.S. Bureau of Labor Statistics reported on September 11, 2026 at 8:30 a.m. BLS The index for all items increased 0.4% in August. BLS Excluding food and energy, the index rose 0.3% in August. Reuters

Energy accounted for a disproportionate share of the sequential move. The index for gasoline rose 3.9 percent in August, accounting for over one-third of the monthly all-items increase. BLS Food continued to run hot on a year-over-year basis. The 12-month change for Food was 3.4 percent in August, with Food at home at 2.7 percent and Cereals and bakery products at 2.2 percent. BLS

The August release was published under the Bureau's regular schedule. The Consumer Price Index news release for September 2026 was scheduled for October 14, 2026 at 8:30 a.m. ET. BLS The October 2026 release is scheduled for November 10, 2026. BLS

Policy was already restrictive heading into the print. The Federal Reserve had kept its policy rate in the 3.50%-3.75% range since December as of September 2026, and inflation had run above the Federal Reserve's target for 5-1/2 years as of September 10, 2026. Reuters Expectations were for inertia. In a September 4-9, 2026 Reuters poll, 65 of 93 economists expected the federal funds rate to remain in the 3.50%-3.75% range the following week. Reuters

Deposit pricing left nominal savers roughly whole against headline inflation, with wide dispersion. In September 2026, Bankrate listed the top high-yield savings account rate as 4.10% APY from CIT Bank and reported the national average savings rate at 0.63% APY. Bankrate Investopedia listed the best high-yield savings account rate as 4.40% APY from Vibrant Credit Union on balances up to $5,001 for new members. Investopedia NerdWallet reported that high-yield accounts could earn as much as 4% APY, against a national average savings rate of 0.38%. NerdWallet

The broader context here is persistence rather than reacceleration. Headline held at 3.4%. Sequential headline at 0.4% with core at 0.3% keeps the three-month and six-month annualized paces uncomfortably above target-consistent rates if sustained. Gasoline explains much of the monthly overshoot. That matters for near-term headline volatility, but for policy it is the least sticky component.

Looking at what this means for the rate path, composition cuts both ways. Energy-driven headline strength does not by itself tighten the labor market or embed services inflation, yet a 0.3% core print alongside 3.4% food inflation gives hawks little room to declare the overshoot contained. With the funds range at 3.50%-3.75% and 5-1/2 years above target, real policy is only modestly positive on a headline-deflated basis. That configuration favors holding until sequential core softens on a sustained basis, which is consistent with the 65-to-93 poll skew toward no change.

In my view, the risk for desks is overweighting the unchanged year-over-year rate. Base effects can hold the 12-month figure flat while the marginal data firm. August did that. Traders pricing duration and front-end exposure should anchor less on 3.4% repeating and more on whether gasoline rolls over and whether food at home, at 2.7% year over year, passes through to away-from-home and wage demands. The September CPI on October 14 will carry more weight for that judgment than August alone.