What To Expect From Friday’s Inflation Report

What To Expect From Friday’s Inflation Report

Thu, September 10, 2026 at 9:42 PM GMT+3 3 min read

Key Takeaways

• The Consumer Price Index is expected to rise 3.4% over 12 months, with core prices increasing 2.4% according to forecasts.

• Rising fuel prices have pushed up the overall inflation rate, while relatively low housing inflation is keeping "core" inflation running cooler.

• Higher-than-expected inflation could cement expectations that the Fed will raise interest rates at its meeting next week.

A highly anticipated and consequential report on the Consumer Price Index on Friday is likely to show inflation stayed elevated in August.

The report from the Bureau of Labor Statistics is expected to show consumer prices rose 3.4% over 12 months in August, the same as in July, according to a survey of economists by Dow Jones Newswires and The Wall Street Journal. The "core" index, which excludes the volatile prices for food and energy, is expected to have risen 2.4% over the year, down from a 2.5% increase in July, but well above the Federal Reserve's target of a 2% annual increase.

Friday's report is especially important for financial markets because it could determine whether the Federal Reserve raises its key interest rate at its next meeting next week. Members of the Federal Open Market Committee have been weighing whether to raise the federal funds rate by a quarter point, putting upward pressure on interest rates for mortgages and other loans in an effort to quash inflation.

"August's CPI report has become very consequential after many FOMC members have signaled they will vote to tighten policy next week in the absence of further progress toward the 2% target," Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics, wrote in a commentary.

What This Means For The Economy

A higher-than-expected inflation report would heavily pressure the Federal Reserve to raise interest rates, which would push up borrowing costs on all kinds of loans throughout the economy.

Forecasters expect higher fuel prices stemming from the war in Iran to push up the overall inflation index, with a smaller increase in core prices because major expense categories such as housing are accelerating at a slower rate.

Economists at Goldman Sachs, for instance, anticipate modest price increases in most core categories other than used cars and air fares. Other forecasters had similar outlooks.

"All told, we expect the report to show that while headline inflation remains influenced by the ebbs and flows of the conflict in the Middle East, core inflation remains contained," economists at Wells Fargo Securities, led by Tom Porcelli, wrote in a commentary.

As of Thursday, financial markets were bracing for a rate hike. Traders were pricing in a 73% chance of a quarter-point rate hike next week, according to the CME Group's FedWatch tool, which forecasts rate movements based on fed funds futures trading data.

"A hotter-than-expected reading would strengthen the case for a hike and add further pressure on mortgage rates," Anthony Smith, senior economist at Realtor.com, wrote in a commentary. "A cooler one could offer some relief."

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