A customer shops at a grocery store on September 10, 2026 in Chicago, Illinois.
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All eyes will be on developments in consumer prices on Wednesday, which could signal increased inflationary pressures as energy costs continue to rise.
Economists polled by Dow Jones expect the headline consumer price index to rise 0.6% in September from the previous month and 3.6% from a year ago. The 12-month numbers would show that inflation is accelerating and moving further away from the Federal Reserve’s 2% target.
So-called core inflation, which subtracts volatile food and energy prices, is expected to rise 0.2% from August and 2.5% on a 12-month basis. Although this is a slight deceleration from the previous month, it still represents an increase in inflation year-on-year.
upside risk
Joe Brusuelas, chief economist at tax firm RSM, said oil prices could push the headline figure higher.
Energy costs have become one of the biggest drivers of inflation since the war between the US and Iran began earlier this year. President Donald Trump announced last week that he would ease diesel restrictions on Russia in a bid to boost global oil trade, but analysts don’t think that will lead to meaningful price declines.
price of brent Crude oil, the world oil benchmark, rose more than 14% in September, taking the third quarter’s rise to about 42%. Brent prices were trading around $105 a barrel on Tuesday.
“There is substantial upside risk to the September CPI,” Bruelas said. “Typically when you have this kind of movement in inflation, everyone’s models are going to underperform the actual results.”
Rising oil prices could also push up the cost of other categories of items besides energy, said Robert Sockin, chief U.S. economist at asset management firm PGIM. In this scenario, it would be more difficult for the Fed to treat high energy prices as short-term shocks that do not require rate hikes.
After announcing its first interest rate hike in three years last month, the Fed indicated in its meeting minutes that it likely would need to raise rates again. Federal funds futures traders expect the central bank to raise rates at its next policy meeting in December, according to CME’s FedWatch tool.
“The list of reasons we think of raising rates is long,” Sockin said. “Ultimately, we have less confidence in the timing of the Fed’s next action, but more confidence in its direction.”
Wednesday’s announcement is the last reading of the CPI before November’s midterm elections and could determine whether Republicans can maintain full control in Washington.
Consumer sentiment data from the University of Michigan shows that economic confidence has declined this year across all political parties. Compared to Democrats, Republicans and independent voters have recorded sharper declines in sentiment since the beginning of 2026, according to the data.
Economists expect the producer price index, a measure of inflation faced by wholesalers, to be released on Thursday to rise 0.6% from August to September and 5.5% on a 12-month basis. Both of these numbers indicate a slight acceleration in growth compared to the August announcement.
