Fed rate hike in September is all but guaranteed after CPI report, economists say
Updated on: September 11, 2026 / 1:40 PM EDT / CBS News
TL;DR
- August's Consumer Price Index rose 3.4% annually, exceeding forecasts and accelerating core price increases.
- The likelihood of a Federal Reserve interest rate hike at the September 16th meeting has jumped to nearly 90%.
- Higher gasoline prices contributed significantly to the monthly inflation increase.
- Economists anticipate a 0.25 percentage point rate hike, bringing the federal funds rate to 3.75%-4%.
- Further rate hikes are projected for December and March 2027 by some analysts.
- Interest rate hikes would increase borrowing costs for consumers but boost returns for savers.
- Recent spikes in oil and diesel prices, exacerbated by geopolitical conflicts, are raising concerns about sustained inflation.
- Some Federal Open Market Committee members have signaled willingness to hike rates due to unsatisfactory disinflation progress.