US CPI inflation accelerates to 3.7% in September 2026, lifting chances of a Federal Reserve rate hike

Key facts

• The US annual inflation rate, measured by the Consumer Price Index (CPI), accelerated to 3.7% in September 2026, up from 3.4% in August and above the market forecast of 3.6%.
• The CPI rose 0.6% month-on-month in September on a seasonally adjusted basis, after a 0.4% rise in August.
• Core CPI, excluding food and energy, rose 0.3% in September and 2.6% annually, up from 2.4% over the 12 months ending August.
• The energy index jumped 5.2% in September after a 2.1% rise in August, and climbed 20.4% over the 12 months ending September.
• The US central bank raised its policy rate by 0.25% to the 3.75%-4.00% range in the previous month.
• Before the CPI release, traders saw a 78% likelihood the Federal Reserve would hold rates at its October 27-28 meeting, up from 53% previously, and anticipate roughly 79 basis points of tightening by late 2027 per CME Group's FedWatch Tool.
• After the CPI data release, the probability of a rate hike rose while the chance of a pause declined to 65%, and US stock futures traded in the red.