All eyes on Fed meeting as US inflation holds steady at 3.4%

11th Sep 2026 13:32

(Sharecast News) - Consumer prices across the United States rose as expected in August, with the headline inflation rate holding steady, as attention turns to next week's Federal Reserve policy meeting amid growing expectations of tighter monetary policy.

The annual change in the consumer price index was 3.4% last month, according to the Bureau of Labor Statistics, in line with July's reading and matching the consensus forecast.

Price pressures have eased over recent months since inflation hit a four-year high of 4.2% in May following the energy price spike caused by the war in Iran.

However, the recent escalation in the conflict has sparked another surge in energy prices over the past week, increasing expectations that the Fed may act next week to stop inflation from getting out of control. The Federal Open Market Committee meets on 15-16 September.

Brent crude hit an intraday high of $109.97 a barrel on Thursday, its highest since May, before pulling back sharply on Friday.

The BLS data showed that core inflation, which excludes food and energy costs that can be volatile month to month, eased to 2.4% in August from 2.5% in July.

The figures follow data on Thursday, which showed that US factory gate inflation accelerated to 5.4% in August from 4.8% in July as rising energy costs pushed producer prices higher. While August's CPI reading met forecasts, higher wholesale prices could feed through to shop tills later down the line.

According to market commentator Stephen Innes, the hotter-than-expected PPI data showed that the energy price spike "is beginning to work its way through diesel, freight and the prices businesses pay before goods reach the consumer".

"Producer prices also contain several components that feed into the Federal Reserve's preferred core PCE measure. CPI may command more attention, but PPI often carries the fingerprints that later appear in the inflation data policymakers follow most closely," he said.