US inflation is once again the release that moves markets the most in 2026. August CPI rose 3.4% year over year, July PCE rose 3.7%, and the Federal Reserve raised rates in September for the first time since 2023. This guide brings together the month-by-month figures, the history since 2019, the difference between the two gauges and what they mean for the dollar, gold and the currencies that react most to the Fed.
US inflation today: the latest data
| Indicator | Latest reading | Year over year | Month over month | Previous (y/y) | Next release |
|---|---|---|---|---|---|
| Headline CPI | August 2026 | 3.4% | +0.4% | 3.4% | October 14 |
| Core CPI (ex food and energy) | August 2026 | 2.4% | +0.3% | 2.5% | October 14 |
| Headline PCE | July 2026 | 3.7% | +0.2% | — | September 30, 08:30 ET |
| Core PCE | July 2026 | 3.3% | +0.2% | — | September 30, 08:30 ET |
For August PCE, released today, the market expects +0.4% month over month for headline (around 3.7% year over year) and +0.3% for core (3.3–3.4% year over year). That is 08:30 New York time and 13:30 in London.
The driver in 2026 is gasoline: in August it rose 3.9% on the month and is 27.4% more expensive than a year ago. It accounted for more than a third of the month's CPI increase. Energy as a whole is up 16.3% year over year, while shelter (3.0%) and food (2.7%) are cooling.
US inflation 2026, month by month
| Month (2026) | CPI y/y | What happened |
|---|---|---|
| January | 2.4% | Low point of the year |
| February | 2.4% | Unchanged |
| March | 3.3% | The energy jump begins |
| April | 3.8% | Gasoline surges |
| May | 4.2% | Peak of the year |
| June | 3.5% | First decline |
| July | 3.4% | Stabilises |
| August | 3.4% | Gasoline rises again (+3.9% on the month) |
| September | — | Released October 14 |
In a few months, inflation went from 2.4% to 4.2%. That jump, which almost nobody expected at the start of the year, explains why the Fed stopped talking about cuts and ended up hiking.
US inflation rate by year since 2019
| Year | Average annual inflation (CPI) |
|---|---|
| 2019 | 1.8% |
| 2020 | 1.2% |
| 2021 | 4.7% |
| 2022 | 8.0% |
| 2023 | 4.1% |
| 2024 | 2.9% |
| 2025 | 2.6% |
2022 was the worst year in four decades: annual inflation peaked at 9.1% in June of that year. It then fell to around 2.4% by early 2026. One detail in the history: October 2025 has no CPI reading, because the federal government shutdown that autumn prevented prices from being collected.
CPI vs PCE: what each one measures
Both measure how fast prices are rising, but in different ways:
- CPI (Consumer Price Index): published by the Bureau of Labor Statistics (BLS) around mid-month. It measures what households pay out of pocket. It is the headline number in the news and the one used to adjust wages and benefits.
- PCE (Personal Consumption Expenditures price index): published by the Bureau of Economic Analysis (BEA) at the end of the month. It also includes spending made on behalf of households, such as the share of healthcare paid by insurers, and it adjusts weights when people switch products. It is the gauge the Fed uses for its 2% target.
- Headline and core: headline includes everything; core strips out food and energy, which are very volatile. The Fed focuses above all on core PCE, because it shows the underlying trend.
Why is PCE running above CPI in 2026?
Normally it is the other way round: historically PCE runs a few tenths below CPI. Today core PCE is almost 0.9 points above core CPI, the biggest gap in more than 40 years. There are three reasons:
- Housing carries different weights: rent makes up 42% of core CPI but only 17% of core PCE. As rents have cooled, they hold back CPI much more.
- Financial services, insurance and healthcare: they weigh much more in PCE and are rising fast this year. Financial services, for example, are up more than 14% year over year.
- The 2025 government shutdown: it left a gap in CPI housing data that has temporarily pulled it lower.
For traders the takeaway is simple: if you only look at CPI (2.4% core), you would think inflation is almost under control. The Fed looks at PCE (3.3%) and sees a problem. That is why it is hiking.
What the Fed is doing about inflation
On September 16 the Federal Reserve raised rates by a quarter point to 3.75%–4.00%, its first hike since 2023, in a unanimous 12–0 vote. Its projections are clear:
- It expects to end 2026 with headline PCE at 3.7% and core at 3.4%.
- 16 of the 18 participants expect at least one more hike this year, and the median points to another quarter point.
- It does not expect to return to the 2% target until 2029, although it projects a sharp drop in 2027 (2.3% headline and 2.5% core).
The next meeting is on October 27–28. On Tuesday, John Williams (New York Fed) said there is "no need for urgency" after the September hike, and the market cut the odds of another hike in October from around 70% to roughly 50%. Other officials, such as Michael Barr and Austan Goolsbee, are pushing for more tightening. Today's PCE and Friday's payrolls will tip the balance.
How US inflation affects the dollar, gold and forex
The chain is almost always the same: high inflation → more Fed hikes → higher bond yields → a stronger dollar.
| Asset | If inflation surprises to the upside | If it surprises to the downside | Current price |
|---|---|---|---|
| Dollar index | Rises | Falls | 101.20 |
| EUR/USD | Falls | Rises | 1.1358 |
| Gold (XAU/USD) | Tends to fall (pays no interest) | Tends to rise | $4,185 |
| USD/MXN | Rises (peso weakens) | Falls | 18.07 |
| USD/COP | Rises | Falls | 3,346 |
We saw it this week: with the US 10-year yield at 5.25%, its highest since 2007, gold fell about 4% on Monday and the dollar hit a two-month high. The Mexican peso is feeling it: USD/MXN trades at 18.07, with a daily RSI of 83, an extreme overbought reading. We track these levels every morning in gold price today and EUR/USD today, and explain the relationship in the gold-dollar correlation.
How to trade inflation release day
- Watch the forecast, not just the number: what moves price is the surprise. A 0.4% reading when 0.3% was expected matters far more than an expected 0.4%.
- Focus on core: if headline rises because of gasoline but core comes in line, the reaction is usually shorter.
- Cut size or wait: in the first few minutes spreads widen and price can swing both ways. A stop that is too tight gets filled with slippage. We explain this in the hidden costs of forex.
- Check the calendar in your time zone: CPI and PCE come out at 08:30 New York time (13:30 London). They are in today's economic calendar.
How to calculate inflation (simple calculator)
Annual inflation is the change in the price index over 12 months:
Inflation (%) = (this month's index ÷ index for the same month a year earlier − 1) × 100
If something cost $100 in August 2025, with inflation at 3.4% it costs about $103.40 today. To see how much purchasing power your money loses over several years, multiply the factors: with 2.9% in 2024 and 2.6% in 2025, $100 at the start of 2024 equals about $105.60 at the end of 2025 (1.029 × 1.026 × 100).
Frequently asked questions
What is the US inflation rate today?
The latest CPI, for August 2026, shows 3.4% year over year (2.4% core). The latest PCE, for July, shows 3.7% (3.3% core). Today, September 30, the August PCE is released at 08:30 New York time.
When is the next US inflation report?
August PCE is out today, September 30, and September CPI on October 14, both at 08:30 New York time (13:30 in London).
Why does the Fed use PCE instead of CPI?
Because PCE covers more spending (including what insurers or the government pay on behalf of households) and adjusts when people switch products. The Fed set its 2% target in terms of PCE in 2012.
Does US inflation affect other countries?
Yes. When US inflation rises, the Fed hikes, the dollar strengthens and emerging-market currencies such as the Mexican peso, the Colombian peso or the Brazilian real tend to weaken. That makes imports more expensive and can force other central banks to keep rates high.
