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Is inflation going up or down right now?

Consumer prices (CPI) are up 3.30% over the past year as of Jul 2026, against the Fed's 2% target. Core PCE — the Fed's preferred gauge — is running at 3.34%.

The September 2026 Inflation Read

The Federal Reserve has eased rates enough to shift policy from restrictive to mildly restrictive, though inflation remains sticky.

The Fed has cut rates to 3.75% and the real borrowing cost has fallen sharply to 0.41%, reducing the drag on the economy. Inflation has ticked up recently and core prices are rising, signaling the Fed may have less room to cut further.

Mildly Restrictive Fed funds 3.75% Real rate 0.41%
Latest observations through September 2026 · CPI observation Jul 2026 · Refreshed Sep 10, 2026 · Sources: FRED, BEA
Monetary policy stress · higher = more stress
35/100
Mildly Restrictive
0 · Accommodative100 · Restrictive
Recent trendpeak 64 · Apr 2025
You are paying less in real terms to borrow for a home or business loan than you were a year ago, which makes mortgages and credit cards slightly easier to afford. How this score is built →
CPI Inflation
3.30%
-0.2ppJul 2026
Core PCE
3.34%
+0.0ppJul 2026
Fed Funds Rate
3.75%
— flatSep 2026
Real Policy Rate
0.41%
-0.0ppJul 2026
10Y–3M Yield Curve
0.88%
Sep 2026

CPI vs Core PCE since 2021.

Headline CPI is what you feel at the register. Core PCE is what the Fed steers by.

CPI (headline, YoY) Core PCE (Fed's gauge, YoY) 2% Fed target

What changed

The Fed has cut rates to 3.75% and the real borrowing cost has fallen sharply to 0.41%, reducing the drag on the economy. Inflation has ticked up recently and core prices are rising, signaling the Fed may have less room to cut further.

What it means for you

You are paying less in real terms to borrow for a home or business loan than you were a year ago, which makes mortgages and credit cards slightly easier to afford. This matters because the Fed was intentionally making money expensive to fight inflation, and now it has backed off, giving households and businesses some breathing room. Watch whether price growth stays above 3% over the next few months, because if inflation stays elevated the Fed will stop cutting rates and may even raise them again.

What to watch next.

Sep11 CPI.
Sep16 Retail Sales.
Sep17 Housing Starts.

Latest inflation analysis.

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All analysis →

Quick answers.

The questions people actually ask about inflation, answered from the data above.

What is the current US inflation rate?
As of Jul 2026, US consumer prices (CPI) are up 3.30% over the past year. Core PCE, the Fed's preferred gauge, is running at 3.34%. The Federal Reserve's target is 2%.
Why does the Fed watch Core PCE instead of CPI?
Core PCE strips out volatile food and energy prices and better reflects what households actually spend, including substitutions when prices change. The Fed's 2% target is defined on PCE. CPI usually runs higher and is what cost-of-living adjustments use.
What is the Fed's policy rate right now?
The Fed funds rate stands at 3.75%, putting the real (inflation-adjusted) policy rate at 0.41%. Whether cuts come depends on inflation returning toward the 2% target.
How does current inflation affect my money?
At 3.30% inflation, cash loses purchasing power at that rate per year. A savings account yielding less than that is losing ground in real terms. The Fed holding rates at 3.75% keeps borrowing costs — mortgages, car loans, credit cards — elevated until inflation trends back toward target.