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BOCOMI: US CPI Still Faces Upside Risks; Probability of Sep Rate Hike Rises Further
2026-09-15 10:23:26
The acceleration in US core inflation on a MoM basis in August means whether to raise interest rates remains a key question, BOCOM International said in a research report. US CPI in August hiked 0.4% MoM, in line, and rebounding notably from 0.1% in July, while growing 3.4% YoY and remaining flat. Core CPI lifted 0.3% MoM, above the expected 0.2%, while the YoY increase eased from 2.5% to 2.4%. Although core inflation continued to decline on a YoY basis, its MoM trend has been rising, increasing from 0% in June and 0.2% in July to 0.3% in August, indicating inflationary pressure has yet to dissipate.

Looking ahead, US Sep CPI still faces further upside risks, the broker mentioned. Crude oil, diesel and the resulting food and transportation costs may become the main driving factors. Recently, WTI crude oil ebbed back above USD100, while US retail diesel prices rose close to record highs. The energy component was the main driver behind the rebound in headline CPI in August, but the impact of this round of energy shocks may not yet be fully reflected. By year-end, even if housing inflation continues to ease gradually, elevated energy prices and sticky services inflation may still keep headline inflation above 3%, while the pace of decline in core inflation may also remain slow.
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