11 September 2026
If you are covering the latest US inflation rate, please find below a comment from Richard Carter, head of fixed interest research at Quilter Cheviot:
“As was forecast by the market, US inflation has held steady at 3.4% in August, with core inflation moderating slightly to 2.4%. Energy prices have spiked once again in September so the inflation picture could easily deteriorate from here for the rest of the year, however. Certainly, it seems events in the Middle East show no sign of calming and as such pressure is on oil and gas prices and this is feeding into the wider economy. Diesel in the US, for example, has just hit an all-time high at $6 per gallon, and with the Midterm elections right around the corner, consumers are unlikely to best pleased of the situation they find prices in.
“Despite it remaining flat in August, the predicted volatility in inflation is likely to cause a headache of the Federal Reserve when it meets next week. Despite slowing economic growth, rate cuts are now firmly off the table regardless of what President Trump may wish for. Instead, Kevin Warsh and the rest of the Board have a high-stakes decision to make on whether to hold or hike interest rates.
“As recent history has shown, central banks can often be late to the party with their monetary policy response and as such a rise in interest rates has to be considered, particularly given for how long inflation has remained above target. They will not want the same accusation to be levelled this time around should the energy shock become even more prolonged, even if the hike itself won’t really impact overall inflation. However, events can change quickly, and as such today’s figures may just give it enough cover to be patient and wait out an extra month, see if the economic environment worsens, before hitting the button on a rate hike.”
