August 2026 inflation stays high as energy costs rise

U.S. inflation remained elevated in August 2026, with the consumer price index rising 3.4% from a year earlier, according to the Bureau of Labor Statistics. The reading was unchanged from July but still well above the Federal Reserve’s 2% target. Economists said the latest inflation data adds pressure ahead of next week’s Fed meeting, though the size and timing of any rate move remain uncertain. Treasury yields have also climbed, which is contributing to higher borrowing costs for consumers. Much of the recent price pressure is tied to the Iran war, which has reduced oil supplies and pushed up gasoline, diesel, jet fuel, and other energy costs. Gasoline prices rose sharply in August, while diesel reached a record high, raising concerns about broader supplychain effects. Economists also pointed to the AI data center buildout and tariffs as additional factors lifting prices for consumer electronics and other goods. They said it remains unclear how much of the energy shock will continue to pass through the economy in the months ahead.