The gasoline index was the biggest contributor to the rise in the index shooting up 3.9%, contributing a third of the monthly gain. The market reaction has been good with S&P Futures rising 0.8% - traders treating the in-line report as acceptable,
The August 2026 CPI Report
The headline numbers came in as estimated except for the monthly core CPI, which came in hotter at 0.3% V the 0.2% estimate.
The Good: The 2.4% core rise is the smallest since March 2021 — all the way back to before inflation reared its ugly head.
The Bad: The gasoline index was the biggest contributor to the rise in the index shooting up 3.9%, contributing a third of the monthly gain. The average price of a gallon of regular gasoline averaged $4.07 in August, according to AAA, much higher than $3.16 a year earlier.
The Not Ugly: The other increases were modest, bringing the overall index lower.
Month over Month increases:
The market reaction has been good with S&P Futures rising 0.8% - traders treating the in-line report as acceptable, especially when gas prices have been up for the past month because of the Iran war. This morning Brent had shot up to $107, but has retreated since. The 10 year and the 30 year treasury yields have dropped to 4.93% and 5.32% respectively
Still, equity markets could take it on the chin next week should the Federal Reserve raise rates. As of this morning traders are indicating a more than 80% chance of a quarter point Fed hike at the FOMC meeting next Wednesday, Sep 16th.
