Data through: August 2026 · updated Sep 11 · Updates: Monthly (released ~2 weeks after month end)
MThe three bars show the last 3 months (end-of-month values) for this indicator, oldest left to newest right. Bar height reflects each reading relative to the other two — the tallest is the highest of the three, the shortest the lowest.
↑ 0.4% MoM
Historical context: Currently in the 60th percentile of all historical readings.
What this means right now: CPI is moderately above the Fed's 2% target — elevated but not alarming. The Fed is likely watching closely and will be reluctant to cut rates until CPI moves lower. Bond markets may face modest pressure.
Consumer Price Index (CPI) · Monthly · 1947–2026
Grey areas = NBER recessions · Scroll to read · zoom and pan in Expand
Monthly values
Consumer Price Index (CPI) — the last 12 months
Every month's reading, with the band the heatmap gives it. The chart above shows the same series in full.
Month
Value
Band
Aug 2026
3.35% YoY
Within normal range
Jul 2026
3.30% YoY
Within normal range
Jun 2026
3.46% YoY
Within normal range
May 2026
4.17% YoY
Concerning reading
Apr 2026
3.78% YoY
Concerning reading
Mar 2026
3.29% YoY
Within normal range
Month-end readings of the same series the chart shows, from cpi_yoy_12m. Values are the current record, not point-in-time: a month that has since been revised shows its revised value.
What is the CPI?
The Consumer Price Index (CPI) measures the year-over-year change in prices paid by urban consumers for a representative basket of goods and services — including food, energy, housing, healthcare, transportation, and education. It is the most widely watched inflation gauge in the United States and the primary metric used by the Federal Reserve when making interest rate decisions.
CPI directly affects investors through two channels. First, high inflation erodes the real (inflation-adjusted) returns on fixed-income investments. Second, and more importantly for stocks, CPI drives Federal Reserve policy — when CPI is above the Fed's 2% target, the Fed raises interest rates, which increases borrowing costs, reduces corporate profits, and pressures stock valuations. The relationship between CPI and the Fed Funds Rate is one of the most important in macroeconomics for investors to understand.
How We Color-Code the CPI
Our heatmap colors each indicator based on historically significant thresholds:
1.0% – 2.0% YoY
At or below Fed target — ideal inflation environment
2.0% – 2.5% YoY
Near target — Fed comfortable, minimal rate pressure
2.5% – 3.5% YoY
Moderately above target — Fed monitoring closely
3.5% – 5.0% YoY
Elevated — Fed likely tightening or holding rates high
Above 5.0% YoY
High inflation — aggressive Fed action, markets under pressure
Historical Extremes — What Happened Next?
When this indicator reaches extreme levels, history shows consistent patterns:
Jun 2022Post-COVID Inflation Peak
CPI: 9.1% YoY
The highest US inflation in 40 years triggered the fastest Fed rate-hiking cycle since 1980. S&P 500 fell -25% during the inflation surge of 2022.
2009-2015Post-Crisis Disinflation
CPI: 0.1% – 2.0% YoY
Extended period of low inflation allowed the Fed to keep rates near zero, supporting a historic bull market from 2009-2021.
Mar 2015Deflation Scare
CPI: -0.1% YoY
Brief deflation episode that spooked the Fed and delayed rate hikes — the market ultimately viewed it as a positive for risk assets.
Investor Checklist — Current Reading
Based on the current CPI reading of 3.35% YoY (Neutral):
ℹAbove target — Fed unlikely to cut rates aggressively, rates stay higher for longer
✓Favor shorter-duration bonds over long-duration in fixed income
⚠Rising CPI trend is more dangerous than stable elevated CPI — watch the direction
Frequently Asked Questions
What is the Federal Reserve's inflation target and why 2%?
The Fed's official target is 2% annual inflation as measured by PCE (Personal Consumption Expenditures), though CPI is closely watched as a related measure. The 2% target provides a buffer against deflation (which can be economically devastating), allows for relative price adjustments across the economy, and gives the Fed room to cut rates during downturns.
What is the difference between CPI and core CPI?
Core CPI excludes food and energy prices, which are volatile and often driven by supply shocks outside the Fed's control. Core CPI better reflects underlying inflation trends. The Fed watches both but gives more weight to core CPI and PCE when making rate decisions. USMacro tracks headline CPI (including food and energy) for the broadest inflation picture.
Why did inflation spike so dramatically in 2021-2022?
The post-COVID inflation surge resulted from multiple simultaneous factors: massive government stimulus increased demand; supply chains were severely disrupted reducing supply; the housing market surged as remote work changed living preferences; energy prices spiked as the economy reopened; and labor shortages drove wages higher. The combination was historically unusual.
How does high CPI affect stock prices?
High CPI affects stocks through two mechanisms: directly (inflation erodes the real value of future corporate earnings) and indirectly (the Fed raises rates to fight inflation, increasing the discount rate on future earnings and making bonds more competitive with stocks). The second mechanism is typically more powerful — the 2022 bear market was primarily rate-driven, not earnings-driven.
What typically happens to markets after CPI peaks?
Historically, once CPI peaks and begins declining, financial markets perform well. The Fed eventually shifts from tightening to cutting rates, which reduces the discount rate on future earnings and boosts valuations. The key is identifying the peak — investors who recognized the June 2022 CPI peak at 9.1% and bought stocks were rewarded with significant gains.