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US Inflation Holds at 3.4 Percent as Fed Hike Looms

By Markets Desk · 2026-09-13 · 1 min read
A neat stack of US dollar bills resting on a textured wooden desk surface.
Illustration: Tradingbird

US inflation stayed at 3.4 percent in August, matching forecasts and reinforcing expectations for a Federal Reserve interest rate increase next week.

US consumer prices rose 3.4 percent year-over-year in August. The Bureau of Labor Statistics released the data on Friday. The figure matched economist expectations exactly.

Core inflation, which excludes food and energy, increased 2.4 percent annually. This marks a slight cooling from 2.5 percent in July. The month-over-month core rise was 0.3 percent, slightly above the 0.2 percent forecast.

Bond Yields React to Data

Yields on 10-year US Treasuries spiked above 5.0 percent immediately after the release. The market quickly reversed this move. Yields settled back near 4.95 percent, returning to pre-announcement levels.

Fed Decision Looms Next Week

This report is the final major indicator before the Federal Reserve meets next Wednesday. Market expectations for a rate hike remain strong. Helaba economist Ralf Umlauf noted that the data supports the consensus view.

The figures confirm that price growth remains elevated relative to the central bank's targets. Trading desks report minimal surprise in the numbers. The focus now shifts entirely to the Fed's policy statement.

Market Consensus Remains Unchanged

Handelsblatt Finanzen highlights that the data aligns with prior estimates. Analysts see no reason to alter their projections for monetary policy. The probability of a rate increase remains high in pricing models.

Based on reporting by Handelsblatt Finanzen, compiled by the Tradingbird desk.

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