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Is inflation going up or down right now?

Consumer prices (CPI) are up 3.46% over the past year as of July 2026, against the Fed's 2% target. Core PCE — the Fed's preferred gauge — is running at 3.41%.

The July 2026 Inflation Read

The Federal Reserve's interest rates are now restrictive enough to cool the economy.

The Fed has held rates steady at 3.75%, keeping borrowing costs high enough to limit spending and investment. Inflation is still running above the Fed's comfort zone, especially in services and wages, which means rate cuts remain unlikely soon.

Mildly Restrictive Fed funds 3.75% Real rate 0.34%
Data through July 2026 · Refreshed Jul 28, 2026 · Sources: FRED, BEA
Monetary policy stress · higher = more stress
41/100
Mildly Restrictive
0 · Accommodative100 · Restrictive
Recent trendpeak 79 · Jul 2024
You are paying more to borrow money for a mortgage, car, or business loan, while prices for everyday goods remain stuck above where they were before recent inflation. How this score is built →
CPI Inflation
3.46%
-0.7ppJuly 2026
Core PCE
3.41%
+0.1ppJuly 2026
Fed Funds Rate
3.75%
— flatJuly 2026
Real Policy Rate
0.34%
-0.1ppJuly 2026
10Y–3M Yield Curve
0.69%
July 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 held rates steady at 3.75%, keeping borrowing costs high enough to limit spending and investment. Inflation is still running above the Fed's comfort zone, especially in services and wages, which means rate cuts remain unlikely soon.

What it means for you

You are paying more to borrow money for a mortgage, car, or business loan, while prices for everyday goods remain stuck above where they were before recent inflation. This squeeze matters because higher rates slow job growth and wage gains, making it harder to improve your financial position. Watch whether wages start falling in real terms or whether companies begin cutting staff—that would signal the Fed is winning the fight but at a real cost.

What to watch next.

Jul31 PCE Inflation report. Watch for core PCE to confirm whether the uptick to 3.41% reflects a genuine reversal or noise. The Fed targets 2% on this measure.
Aug7 Nonfarm Payrolls report. The 57,000 print was weak. A rebound above 150,000 would ease recession fears; another decline would deepen labor market concerns.
Jul29 GDP release. Current growth stands at 2.10%. A slowdown here combined with weak jobs data could force the Fed to cut rates sooner than expected.

Latest inflation analysis.

Written after each data release. Plain English, no jargon.

Cpi Inflation

CPI June 2026: U.S. Inflation Came In at 3.46%

Inflation ticked back up to 3.46%, reversing months of progress and raising questions about whether price growth is truly under control. Thi

July 2026 Mortgage Rate 30Y

30-Year Mortgage Rate July 2026: Now at 6.43%

Mortgage rates holding steady at 6.43% as the market finds its footing. For buyers already stretching budgets, stability means at least you'

July 2026 Fed Funds Rate

Fed Funds Rate July 2026: Fed Holds at 3.75%

The Federal Reserve kept interest rates unchanged at 3.75%, holding its ground as inflation cools and the job market shows signs of strain.

July 2026
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 July 2026, US consumer prices (CPI) are up 3.46% over the past year. Core PCE, the Fed's preferred gauge, is running at 3.41%. 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 0.34%. Whether cuts come depends on inflation returning toward the 2% target.
How does current inflation affect my money?
At 3.46% 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.