MediumIV Macro Policy & Sovereign Debt11 September 2026, Friday · 15:30 TRT (UTC+3)
US headline inflation rises to 3.4% in August while core inflation eases to 2.4%
More than a third of the monthly increase came from petrol; there was no acceleration in non-energy prices.
According to data released by the US Bureau of Labor Statistics on 11 September, consumer prices rose 0.4% month on month and 3.4% year on year in August. The core index excluding food and energy rose 0.3% on the month, while the annual rate eased from 2.5% in July to 2.4%. The energy index rose 2.1% on the month; petrol, up 3.9%, alone accounted for more than a third of the monthly increase.
The picture shows that inflationary pressure is supply-driven rather than demand-driven: the one-point gap between headline and core stems largely from energy prices. This distinction sums up the tension at the heart of the Fed's 16 September decision; monetary policy cannot change oil supply, but it seeks to prevent inflation expectations from rising permanently.
Talay assessment
Bottom line
The August data show plainly that US inflation stems from energy supply rather than demand: headline rose to 3.4% while core eased to 2.4%. This is a period in which the Fed's real task is to control expectations rather than prices. The most likely path is headline staying high while energy remains elevated and core staying flat; the main risk is energy seeping into core through second-round effects.
Likely effects
- US household purchasing powerNegativeWeeks
Gasoline accounting for more than a third of the monthly rise hits lower-income households, where energy takes a larger share of spending, disproportionately and squeezes other consumption.
- Global interest-rate settingNegative1–6 months
Although supply-driven, high headline inflation legitimises the Fed's tight stance; via dollar rates this tightens financing conditions for emerging economies.
- Türkiye inflation and the CBRTNegative1–6 months
The same energy shock pushes up headline inflation in Türkiye; the Fed's tight stance narrows the CBRT's room for easing and may force monetary policy to stay tight for longer.
Possibilities, ranked
- 1High headline, flat core60%
Energy prices stay high and headline inflation remains above 3%; core inflation stays contained around 2.4% and expectations remain anchored.
Watch: Monthly core CPI at or below 0.3% and the path of the gasoline index
- 2Pass-through to core25%
Energy costs feed into transport and services prices and core inflation rises again; the Fed is forced to tighten further.
Watch: Consecutive monthly core CPI rises above 0.3% and higher readings in inflation-expectations surveys
- 3Disinflation as energy eases15%
Oil prices fall, the gasoline index declines and headline inflation converges towards core; tightening pressure eases.
Watch: A monthly fall in the gasoline index and a sustained decline in Brent
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.