# CPI in August

In Aug 2026

Updated: May 8, 2026

Category: Economics

Tags: Inflation

HTML: /markets/economics/inflation/cpi-in-august/

## Short Answer

**Key takeaway.** Both the **model** and the **market** expect CPI in August 2026 to be Above -**0.1%**, with no compelling evidence of mispricing.

## Key Claims (January 2026)

**- - Major institutions forecast persistent elevated inflation into August 2026.** - Geopolitical risks may pose an upside surprise for August CPI.
- Major oil shocks and trade tensions may threaten August 2026 CPI.
- Core inflation components suggest steady-to-cool price pressures by August 2026.
- PCE inflation has notably outpaced CPI throughout 2026.
- Stronger economic growth may boost demand, potentially raising August CPI.

### Why This Matters (GEO)

- AI agents extract claims, not arguments.
- Improves citation probability in summaries and answer cards.
- Enables fact stitching across multiple sources.

## Executive Verdict

**Key takeaway.** **Market**'s 86c implies 1.2x payout but is above the **84.1%** **model**, despite oil shock risks for August 2026 CPI.

### Who Wins and Why

| Outcome | Market | Model | Why |
| --- | --- | --- | --- |
| Above 0.3% | 40.0% | 38.4% | Major forecasts and recent data indicate persistent elevated inflation and potential upside risks for August. |
| Above 0.0% | 85.0% | 83.0% | Major forecasts and recent data indicate persistent elevated inflation and potential upside risks for August. |
| Above 0.5% | 30.0% | 29.3% | Major forecasts and recent data indicate persistent elevated inflation and potential upside risks for August. |

## Model vs Market

| Outcome | Market Probability | Octagon Model Probability |
| --- | --- | --- |
| Above 0.3% | 40.0% | 38.4% |
| Above 0.0% | 85.0% | 83.0% |
| Above 0.5% | 30.0% | 29.3% |
| Above 0.4% | 34.0% | 32.9% |
| Above -0.1% | 86.0% | 84.1% |
| Above 0.1% | 75.0% | 72.3% |
| Above 0.2% | 57.0% | 54.3% |

- Expiration: September 11, 2026

## Market Behavior & Price Dynamics

This prediction market has shown a distinct upward trend, with the probability of August 2026 YoY CPI exceeding 0.1% rising from a starting point of 79% to a current price of 86%. A significant movement occurred in early May, when the price jumped from 81% to 86%. This increase in perceived probability appears to be a reaction to recent economic indicators mentioned in the provided context, specifically the March 2026 CPI data which showed a 3.3% year-over-year increase. The market seems to have integrated this information, alongside reports of increased inflation forecasts, by pricing in a higher likelihood of inflation remaining above the 0.1% threshold.

The total trading volume of 219 contracts indicates a moderate level of market participation. However, the sample data points show that the initial price appreciation occurred on zero volume, which could suggest the move was not driven by strong conviction at that moment. The price has since established a new trading range, with the initial price of 79% acting as a support level and the high of 88% serving as resistance. The current price of 86% suggests that market sentiment has solidified around a high probability of the "Yes" outcome. The sustained higher price level reflects a consensus that inflationary pressures are expected to persist, keeping the YoY CPI figure above the market's 0.1% baseline.

## Significant Price Movements

### Outcome: Above 0.3%

#### 📉 May 06, 2026: 9.0pp drop

Price decreased from 52.0% to 43.0%

**What happened:** The provided research does not identify a clear primary driver for the 9.0 percentage point drop in the "CPI in August Above 0.3%" prediction market on May 06, 2026. News on that day and May 05, 2026, from sources like Bloomberg and Business Insider, indicated rising inflation concerns, including a warning from the Fed's Goolsbee and a "Rare Inflation Signal" from Stifel [[^]](https://www.businessinsider.com/inflation-warning-signal-tech-ai-price-boom-wage-growth-stifel-2026-5). Such reports would typically suggest an increased, not decreased, likelihood of August CPI being above 0.3%. No specific social media activity or market structure event was identified in the provided information that aligns with a decrease in inflation expectations on this date. Social media activity appears to be irrelevant to this particular price movement based on the available data.

#### 📈 May 05, 2026: 10.0pp spike

Price increased from 42.0% to 52.0%

**What happened:** The primary driver of the price movement was the Federal Reserve's updated inflation forecast released on May 5, 2026, which revised its trailing-twelve-month inflation projection to 3.56% and explicitly stated no 2026 rate cuts were expected due to an ongoing energy shock [[^]](https://www.fool.com/investing/2026/05/05/yikes-fed-april-inflation-forecast-was-just-update/). This official announcement, coinciding with the market spike, directly signaled persistent inflationary pressures. While Donald Trump posted a social media attack on Powell on May 5, calling him a "disaster" amidst high yields and mortgages [[^]](https://www.coingabbar.com/en/crypto-currency-news/cpi-date-change-everything-may-12-trump-vs-powell-fed-inflation), this social media activity acted as a contributing accelerant to existing inflation concerns, rather than the primary cause.

### Outcome: Above 0.0%

#### 📉 May 04, 2026: 10.0pp drop

Price decreased from 83.0% to 73.0%

**What happened:** The primary driver of the prediction market price drop was the publication of a U.S. April CPI preview by ContinuumEconomics on May 04, 2026 [[^]](https://continuumeconomics.com/a/60020f70/preview-due-may-11-us-april-cpi-energy-to-rise-less-sharply-than-n-march-but-air-fares-to-lift-the-core). This report forecasted April CPI to rise about +0.5% overall and +0.3% excluding food and energy, crucially noting that energy would rise less sharply than in March [[^]](https://continuumeconomics.com/a/60020f70/preview-due-may-11-us-april-cpi-energy-to-rise-less-sharply-than-n-march-but-air-fares-to-lift-the-core). This outlook likely prompted a revision of future inflation expectations, suggesting an easing of inflationary pressures that reduced confidence in CPI being significantly "Above 0.0%" in August. Based on the provided research, social media activity was irrelevant to this market movement [[^]](https://www.bls.gov/news.release/archives/cpi_04102026.htm).

### Outcome: Above 0.1%

#### 📉 May 02, 2026: 9.0pp drop

Price decreased from 74.0% to 65.0%

**What happened:** The provided information does not identify a primary driver for the 9.0 percentage point drop in the "CPI in August Above 0.1%" prediction market on May 02, 2026. Traditional news from late April and early May 2026 reported high and rising inflation, with March 2026 CPI at 0.9% MoM and PCE at 0.7% MoM, driven by factors like an "Iran war" and soaring gas prices [[^]](https://www.bls.gov/news.release/cpi.nr0.htm). This economic context would typically suggest an *increased* likelihood of August CPI being above 0.1%, rather than the observed decrease. No social media activity from key figures or viral narratives is found in the provided sources. Based on the available data, social media was irrelevant.

#### 📈 April 26, 2026: 10.0pp spike

Price increased from 64.0% to 74.0%

**What happened:** The provided sources do not contain information directly identifying a primary driver, particularly social media activity, for a 10.0 percentage point spike in the "CPI in August: Above 0.1%" prediction market on April 26, 2026. The only relevant data pertains to a substantial 0.9% increase in the March 2026 CPI-U, driven by a 21.2% rise in gasoline prices due to an oil shock, which was officially announced around April 10, 2026 [[^]](https://www.bls.gov/news.release/cpi.htm). While this significant inflation could influence general expectations, the sources provide no specific link to the August CPI market movement or related social media activity on the specified date. Therefore, social media was not identified as a primary driver or contributor based on the available information.

## Contract Snapshot

This market resolves to YES if the August 2026 Consumer Price Index (CPI) increases by more than 0.2% (single-decimal); otherwise, it resolves to NO. The Bureau of Labor Statistics (BLS) verifies the outcome using the single-decimal value, with trading closing on September 11, 2026, at 8:25 AM EDT and projected payout at 10:01 AM EDT. Should a government shutdown delay data release, the market's expiration will be extended, and insider trading is prohibited.

## Market Discussion

Prediction market participants appear to peg August CPI around 2.8% headline and 3.1% core, signaling expectations of contained inflation and potential for easing [[^]](https://news.kalshi.com/p/kalshi-traders-peg-august-cpi-28). Markets like Robinhood's "CPI in August" (event September 11, 2026) show active contract trading for various percentage increases [[^]](https://robinhood.com/us/en/prediction-markets/economics/events/cpi-in-august-sep-11-2026/). Public discussion on platforms such as Polymarket actively debates these outcomes [[^]](https://polymarket.com/event/august-inflation-monthly), with some commentators observing a sentiment for significant rate cuts post-August CPI, while others question the market's implied magnitude [[^]](https://pro.thestreet.com/portfolio/our-updated-game-plan-with-the-august-cpi-report-in-hand).

## Market Data

| Contract | Yes Bid | Yes Ask | Last Price | Volume | Open Interest |
| --- | --- | --- | --- | --- | --- |
| Above -0.1% | 84% | 88% | 86% | $1,143 | $289 |
| Above 0.0% | 82% | 87% | 85% | $1,366.35 | $308.35 |
| Above 0.1% | 68% | 73% | 75% | $1,010 | $158 |
| Above 0.2% | 57% | 61% | 57% | $874 | $233 |
| Above 0.3% | 36% | 40% | 40% | $2,537.08 | $446.08 |
| Above 0.4% | 27% | 32% | 34% | $1,279 | $436 |
| Above 0.5% | 26% | 27% | 30% | $1,334 | $447 |

## What potential geopolitical events or supply chain pressures in summer 2026 pose the greatest risk of an inflation surprise in the August CPI report?

Global Commodity Prices Rise | 16% in 2026 [[^]](https://blogs.worldbank.org/en/developmenttalk/the-commodity-markets-outlook-in-eight-charts3)[[^]](https://www.radiotamazuj.org/en/news/article/global-commodity-prices-seen-up-16-in-2026-stoking-inflation)[[^]](https://globalmarkets.cib.bnpparibas/global-outlook-spring-2026-looking-beyond-the-war/)[[^]](https://www.imf.org/en/publications/weo/issues/2026/04/14/world-economic-outlook-april-2026)[[^]](https://www.weforum.org/press/2026/01/global-risks-report-2026-geopolitical-and-economic-risks-rise-in-new-age-of-competition/)[[^]](https://www.mapfre.com/en/insights/economy/inflation-global-economy-geopolitics/)[[^]](https://www.piie.com/blogs/realtime-economics/2026/risk-higher-us-inflation-2026)[[^]](https://www.ecb.europa.eu/stats/ecb_surveys/survey_of_professional_forecasters/html/ecb.spf2026q2.en.html) |
Crude Oil Price Surge | $200/bbl [[^]](https://www.alvarezandmarsal.com/thought-leadership/navigating-the-2026-energy-crisis-beyond-the-headlines)[[^]](https://www.radiotamazuj.org/en/news/article/global-commodity-prices-seen-up-16-in-2026-stoking-inflation) |
Fertilizer Prices Rise | 31% in 2026 [[^]](https://blogs.worldbank.org/en/developmenttalk/the-commodity-markets-outlook-in-eight-charts3)[[^]](https://www.radiotamazuj.org/en/news/article/global-commodity-prices-seen-up-16-in-2026-stoking-inflation) |

**Major oil shocks and trade tensions threaten August 2026 CPI**

Major oil shocks and trade tensions threaten August 2026 CPI. The greatest risks for an inflation surprise in the August 2026 CPI report stem from potential major oil supply shocks, which could significantly increase crude prices, directly impacting energy, transportation, and manufacturing costs across all sectors [[^]](https://www.alvarezandmarsal.com/thought-leadership/navigating-the-2026-energy-crisis-beyond-the-headlines)[[^]](https://www.radiotamazuj.org/en/news/article/global-commodity-prices-seen-up-16-in-2026-stoking-inflation)[[^]](https://agrichain.com/blog/agri-supply-chain-challenges-and-how-to-solve-them)[[^]](https://blogs.worldbank.org/en/developmenttalk/the-commodity-markets-outlook-in-eight-charts3)[[^]](https://globalmarkets.cib.bnpparibas/global-outlook-spring-2026-looking-beyond-the-war/)[[^]](https://knowerx.com/inflation-due-to-supply-chain-disruption-knowerx/)[[^]](https://www.investing.com/news/economy-news/supply-chain-pressures-hit-highest-level-since-2022-amid-middle-east-conflict-4664233)[[^]](https://www.mapfre.com/en/insights/economy/inflation-global-economy-geopolitics/)[[^]](https://www.spglobal.com/**market**-intelligence/en/news-insights/research/2026/05/global-pmi-shows-prices-rising-sharply-amid-worsening-supply-chain-delays)[[^]](https://www.ecb.europa.eu/stats/ecb_surveys/survey_of_professional_forecasters/html/ecb.spf2026q2.en.html). Simultaneously, intensifying trade clashes between Europe and China, involving new tariffs or export restrictions in strategic sectors like electric vehicles and semiconductors, are expected to disrupt global supply chains and raise import prices [[^]](https://www.forbes.com/sites/esade/2025/12/19/the-geopolitical-risks-that-will-shape-global-business-in-2026/)[[^]](https://www.lazard.com/research-insights/top-geopolitical-trends-in-2026/)[[^]](https://www.just-style.com/news/relex-report-tariffs-supply-chain/). This reflects a persistent trend of "geoeconomic confrontation" and new economic nationalism that is projected to continue, altering trade flows and increasing costs [[^]](https://veson.com/resources/shipping-**market**-outlook-executive-summary-q1-2026/)[[^]](https://www.globaltrademag.com/how-geopolitical-tensions-in-2026-are-reshaping-global-supply-chain-strategies/)[[^]](https://www.lazard.com/research-insights/top-geopolitical-trends-in-2026/)[[^]](https://www.ey.com/en_us/insights/geostrategy/geostrategic-outlook)[[^]](https://www.weforum.org/press/2026/01/global-risks-report-2026-geopolitical-and-economic-risks-rise-in-new-age-of-competition/). Furthermore, the surging demand for power driven by AI investments and data center expansion is straining existing electricity grids, contributing to rising energy-related expenses that could broadly fuel inflation [[^]](https://www.spglobal.com/energy/en/news-research/special-reports/energy-transition/horizons-top-cleantech-trends-2026)[[^]](https://globalmarkets.cib.bnpparibas/global-outlook-spring-2026-looking-beyond-the-war/)[[^]](https://www.investing.com/news/economy-news/supply-chain-pressures-hit-highest-level-since-2022-amid-middle-east-conflict-4664233).

Food prices face significant upward pressure from multiple factors. Fertilizer prices are projected to rise due to Middle East disruptions and elevated natural gas costs, directly threatening global crop yields and increasing food production expenses [[^]](https://blogs.worldbank.org/en/developmenttalk/the-commodity-markets-outlook-in-eight-charts3)[[^]](https://www.radiotamazuj.org/en/news/article/global-commodity-prices-seen-up-16-in-2026-stoking-inflation)[[^]](https://www.dtnpf.com/agriculture/web/ag/blogs/ag-policy-blog/blog-post/2026/05/07/hormuz-crisis-sparks-un-warning-crop)[[^]](https://investments.metlife.com/content/dam/metlifecom/us/investments/insights/research-topics/public-fixed-income/images-new/Article/us-agricultural-outlook-2026/us-agricultural-outlook-2026.pdf). The agricultural sector also anticipates severe labor shortages in 2026, exacerbated by stricter immigration policies, which could delay harvests, slow processing, and disrupt transport, ultimately leading to higher food prices [[^]](https://agrichain.com/blog/agri-supply-chain-challenges-and-how-to-solve-them). Additionally, extreme weather events such as droughts, floods, or unexpected freezes in key food-producing regions during summer 2026 could significantly reduce crop yields and drive up food commodity prices [[^]](https://agrichain.com/blog/agri-supply-chain-challenges-and-how-to-solve-them)[[^]](https://blogs.worldbank.org/en/developmenttalk/global-agricultural-markets-in-2026--stabilizing-prices--persist)[[^]](https://www.agrolatam.com/weather/weather-forecast-2026-us-agriculture-supply-chain/)[[^]](https://blogs.worldbank.org/en/developmenttalk/the-commodity-markets-outlook-in-eight-charts3).

Geopolitical shipping disruptions and past tariffs add inflationary pressure. While some forecasts anticipate a potential decline in ocean freight rates due to overcapacity in 2026, ongoing geopolitical uncertainties, particularly Red Sea rerouting, continue to cause extended voyage lengths, higher fuel costs, and increased insurance premiums [[^]](https://veson.com/resources/shipping-**market**-outlook-executive-summary-q1-2026/)[[^]](https://es-us.ups.com/ar/en/supplychain/resources/news-and-**market**-updates/2026-supply-chain-outlook)[[^]](https://mybluegrace.com/blog/2026-shipping-outlook/)[[^]](https://www.alixpartners.com/media/s12pyi2i/2026-container-shipping-outlook-sli01sig2026.pdf)[[^]](https://www.lloydslist.com/LL1155940/Shipping-in-2026-and-beyond-the-future-isnt-what-it-used-to-be)[[^]](https://knowerx.com/inflation-due-to-supply-chain-disruption-knowerx/)[[^]](https://www.investing.com/news/economy-news/supply-chain-pressures-hit-highest-level-since-2022-amid-middle-east-conflict-4664233)[[^]](https://www.mapfre.com/en/insights/economy/inflation-global-economy-geopolitics/). Moreover, the delayed effects of previous tariffs are expected to continue passing through to consumer prices in the first half of 2026, further contributing to inflationary pressures [[^]](https://weaver.com/resources/supply-chain-inflation-expectations-add-to-provider-challenges/)[[^]](https://www.investing.com/news/economy-news/supply-chain-pressures-hit-highest-level-since-2022-amid-middle-east-conflict-4664233)[[^]](https://www.just-style.com/news/relex-report-tariffs-supply-chain/)[[^]](https://www.piie.com/blogs/realtime-economics/2026/risk-higher-us-inflation-2026).

## What do the most recent 2026 trends in core inflation components, specifically shelter and services ex-housing, indicate about underlying price pressures leading into August?

Shelter MoM Increase (March 2026) | +0.3% [[^]](https://www.bls.gov/news.release/cpi.nr0.htm) |
Shelter YoY Increase (March 2026) | +3.0% [[^]](https://www.bls.gov/news.release/cpi.nr0.htm) |
Core Services ex-Housing 12-month rate (March) | +3.4% [[^]](https://x.com/NickTimiraos/status/2049889546792317332) |

**Recent trends in core inflation components suggest a steady-to-cool underlying price-pressure profile leading into August 2026**

Recent trends in core inflation components suggest a steady-to-cool underlying price-pressure profile leading into August 2026. This assessment is consistent with shelter’s ongoing lagged transmission from softer **market** rents and core services ex-housing maintaining a sideways trajectory [[^]](https://piedmontcrescentcapital.com/consumer-price-index-march-2026-energy-shock-lifts-headline-core-inflation-remains-contained/)[[^]](https://www.zillow.com/research/cpi-forecast-2026-apr-36302/amp/)[[^]](https://x.com/NickTimiraos/status/2049889546792317332).

Shelter disinflation continues, driven by lagged transmission from softer **market** rents. The March 2026 Consumer Price Index (CPI) release indicated that shelter rose +**0.3%** month-over-month and +**3.0%** year-over-year [[^]](https://www.bls.gov/news.release/cpi.nr0.htm). This demonstrates that shelter disinflation remains the dominant margin shift rather than a re-acceleration of services. With shelter’s year-over-year rate near **3.0%**, a decrease from prior peaks, this trend aligns with the ongoing lagged transmission from softer **market** rents [[^]](https://piedmontcrescentcapital.com/consumer-price-index-march-2026-energy-shock-lifts-headline-core-inflation-remains-contained/)[[^]](https://www.zillow.com/research/cpi-forecast-2026-apr-36302/amp/)[[^]](https://x.com/NickTimiraos/status/2049889546792317332).

Core services ex-housing has remained stable, not trending higher over the past year. This component’s 12-month rate has held steady around mid-**3%**, specifically quoted as +**3.4%** for the 12 months ended March [[^]](https://x.com/NickTimiraos/status/2049889546792317332). This suggests that underlying non-shelter service inflation pressure is not meaningfully trending higher into mid-2026, which contributes to an implied underlying price-pressure profile that is steady-to-cool through the coming months [[^]](https://x.com/NickTimiraos/status/2049889546792317332)[[^]](https://piedmontcrescentcapital.com/consumer-price-index-march-2026-energy-shock-lifts-headline-core-inflation-remains-contained/)[[^]](https://www.zillow.com/research/cpi-forecast-2026-apr-36302/amp/). A prediction-**market** datapoint for "CPI core year-over-year in Aug 2026?" from FieldEstimate shows live odds but possesses very low liquidity, thus it should be treated as directional rather than definitive [[^]](https://fieldestimate.org/markets/kalshi/cpi-core-year-over-year-in-aug-2026-exactly-2-7).

## How have the Federal Reserve's preferred PCE inflation metric and the headline CPI differed throughout 2026, and what does this divergence imply for the August report?

Headline PCE inflation (March 2026) | 3.50% year-over-year [[^]](https://en.macromicro.me/charts/127220/U-S-Federal-Reserve-Key-Observations-CPI-and-PCE-Annualized-Inflation-Rate)[[^]](https://www.jec.senate.gov/public/index.cfm/republicans/expenditures-update)[[^]](https://tradingeconomics.com/united-states/inflation-cpi)[[^]](https://www.advisorperspectives.com/dshort/updates/2026/04/30/two-measures-of-inflation-march-2026)[[^]](https://www.jec.senate.gov/public/index.cfm/republicans/expenditures-update) |
Core PCE inflation (March 2026) | 3.2% [[^]](https://en.macromicro.me/charts/127220/U-S-Federal-Reserve-Key-Observations-CPI-and-PCE-Annualized-Inflation-Rate)[[^]](https://www.jec.senate.gov/public/index.cfm/republicans/expenditures-update)[[^]](https://tradingeconomics.com/united-states/inflation-cpi)[[^]](https://www.advisorperspectives.com/dshort/updates/2026/04/30/two-measures-of-inflation-march-2026)[[^]](https://www.jec.senate.gov/public/index.cfm/republicans/expenditures-update) |
Core PCE (3-month annualized, Feb 2026) | 4.1% [[^]](https://seekingalpha.com/article/4900373-us-inflation-measures-tell-two-different-stories) |

**PCE inflation has notably outpaced CPI in 2026**

PCE inflation has notably outpaced CPI in 2026. Throughout the year, the Federal Reserve's preferred Personal Consumption Expenditures (PCE) inflation metric has consistently run higher than the headline Consumer Price Index (CPI), marking a reversal of historical trends [[^]](https://seekingalpha.com/article/4900373-us-inflation-measures-tell-two-different-stories)[[^]](https://www.clevelandfed.org/collections/infographics/2024/infogr-20241205-cpi-versus-pce-price-index)[[^]](https://www.advisorperspectives.com/dshort/updates/2026/04/30/two-measures-of-inflation-march-2026). As of March 2026, headline PCE inflation stood at **3.50%** year-over-year, while headline CPI registered **3.3%**. Similarly, core PCE inflation reached **3.2%**, compared to core CPI's **2.6%** [[^]](https://en.macromicro.me/charts/127220/U-S-Federal-Reserve-Key-Observations-CPI-and-PCE-Annualized-Inflation-Rate)[[^]](https://www.jec.senate.gov/public/index.cfm/republicans/expenditures-update)[[^]](https://tradingeconomics.com/united-states/inflation-cpi)[[^]](https://www.advisorperspectives.com/dshort/updates/2026/04/30/two-measures-of-inflation-march-2026)[[^]](https://www.jec.senate.gov/public/index.cfm/republicans/expenditures-update). This shift has resulted in a 60 basis point positive difference between PCE and CPI on a year-over-year basis, moving beyond its traditionally negative range. The three-month annualized pace of core PCE also saw a significant increase, surging from **2.4%** in November 2025 to **4.1%** in February 2026 [[^]](https://seekingalpha.com/article/4900373-us-inflation-measures-tell-two-different-stories).

Methodological differences drive the observed inflation metric divergence. This variation between PCE and CPI is attributed to several factors, including distinct methodologies, broader scope, and differing weighting schemes [[^]](https://seekingalpha.com/article/4900373-us-inflation-measures-tell-two-different-stories)[[^]](https://ww2.amstat.org/meetings/proceedings/2017/data/assets/pdf/594094.pdf)[[^]](https://www.clevelandfed.org/collections/infographics/2024/infogr-20241205-cpi-versus-pce-price-index)[[^]](https://www.pictoninvestments.com/en/insights/qotw-08-04-2026). PCE utilizes a chain-weighted Fisher-Ideal formula, which adjusts for consumer substitution patterns, whereas CPI employs a fixed-weight index. Additionally, PCE incorporates certain items like employer-paid health insurance that are not included in CPI [[^]](https://seekingalpha.com/article/4900373-us-inflation-measures-tell-two-different-stories)[[^]](https://ww2.amstat.org/meetings/proceedings/2017/data/assets/pdf/594094.pdf)[[^]](https://www.clevelandfed.org/collections/infographics/2024/infogr-20241205-cpi-versus-pce-price-index)[[^]](https://www.pictoninvestments.com/en/insights/qotw-08-04-2026). Weighting schemes also differ significantly; shelter holds a larger weight in CPI (approximately **34%**) compared to PCE (around **16%**), while PCE gives greater weight to healthcare, financial services, and technology-related products [[^]](https://seekingalpha.com/article/4900373-us-inflation-measures-tell-two-different-stories)[[^]](https://www.clevelandfed.org/collections/infographics/2024/infogr-20241205-cpi-versus-pce-price-index)[[^]](https://www.pictoninvestments.com/en/insights/qotw-08-04-2026)[[^]](https://www.oxfordeconomics.com/resource/us-pce-nowcast-rise-in-core-inflation-isnt-a-signal-for-2026/). Furthermore, rising tariff costs and energy-sensitive supply chains are contributing to the increase in PCE, with tariffs projected to add 50 basis points to headline inflation by mid-2026. Geopolitical conflicts have the potential to further widen this gap [[^]](https://seekingalpha.com/article/4900373-us-inflation-measures-tell-two-different-stories)[[^]](https://www.piie.com/blogs/realtime-economics/2026/risk-higher-us-inflation-2026).

Persistent PCE inflation complicates Federal Reserve's policy decisions. The sustained and widening gap, with PCE inflation increasing more rapidly, suggests that inflationary pressures in categories heavily weighted by PCE, such as technology and specific services, are transitioning from transitory to more structural in nature [[^]](https://seekingalpha.com/article/4900373-us-inflation-measures-tell-two-different-stories). This trend complicates the Federal Reserve's outlook on monetary policy and its considerations for potential interest rate cuts [[^]](https://seekingalpha.com/article/4900373-us-inflation-measures-tell-two-different-stories). Looking ahead, prediction markets and some economists anticipate continued increases in CPI, with a risk of overall inflation surpassing **4%** by the end of 2026 due to various economic factors [[^]](https://www.piie.com/blogs/realtime-economics/2026/risk-higher-us-inflation-2026)[[^]](https://kalshi.com/markets/kxcpi/cpi/kxcpi-26aug)[[^]](https://www.morningstar.com/economy/august-cpi-report-forecasts-point-sticky-inflation-tariff-pressures).

## Which precursor data releases in August and early September 2026, such as the Producer Price Index (PPI), will be most critical for traders to watch ahead of the official CPI report?

PCE Price Index for July 2026 Release | Around August 26, 2026 [[^]](https://www.tradingcalendar.com/pce) |
August 2026 ISM Manufacturing PMI Release | First business day of September 2026 [[^]](https://www.ismworld.org/supply-management-news-and-reports/reports/rob-report-calendar/) |
August 2026 ISM Services PMI Release | Third business day of September 2026 [[^]](https://www.ismworld.org/supply-management-news-and-reports/reports/rob-report-calendar/) |

**The Personal Consumption Expenditures (PCE) Price Index is a critical inflation gauge**

The Personal Consumption Expenditures (PCE) Price Index is a critical inflation gauge. For traders monitoring precursor data ahead of the official CPI report, the PCE Price Index for July 2026 is a key release. This index serves as the Federal Reserve's preferred measure of inflation and is scheduled for release around August 26, 2026 [[^]](https://www.tradingcalendar.com/pce). Its core reading, which excludes volatile food and energy components, is particularly scrutinized for insights into underlying inflationary trends [[^]](https://www.bea.gov/data/personal-consumption-expenditures-price-index-excluding-food-and-energy).

ISM PMIs and Import/Export Price Indexes offer leading inflation signals. The August 2026 ISM Manufacturing and Services PMIs are important indicators to watch. The ISM Manufacturing PMI is anticipated on the first business day of September 2026, while the ISM Services PMI is expected on the third business day of September 2026 [[^]](https://www.ismworld.org/supply-management-news-and-reports/reports/rob-report-calendar/). These reports contain "Prices Paid" sub-indexes, which are widely considered leading indicators of future inflation [[^]](https://www.fxstreet.com/economic-calendar/event/6c5853c1-a409-4722-bdea-17ad5d8a193f). Additionally, the U.S. Import and Export Price Indexes for July 2026 are scheduled for release around August 18, 2026 [[^]](https://www.bls.gov/schedule/news_release/ximpim.htm).

## How do the high-frequency inputs used by the Cleveland Fed's Nowcast compare to the econometric models used by major banks like Goldman Sachs for forecasting Q3 2026 inflation?

Cleveland Fed Nowcast Update Frequency | daily [[^]](https://www.thecoinrepublic.com/2024/02/17/the-cleveland-feds-reliable-approach-to-inflation-nowcasting/) |
Goldman Sachs Core PCE Inflation Forecast | around 2.2% by December 2026 (excluding tariff effects) [[^]](https://www.thestreet.com/economy/goldman-just-released-its-inflation-playbook-for-the-rest-of-2026)[[^]](https://www.goldmansachs.com/insights/articles/forecasts-for-the-worlds-biggest-economies-in-2026)[[^]](https://www.gspublishing.com/content/research/en/reports/2026/01/11/4d2301ad-a4bc-44a8-b36d-42b47a4b5bd4.html)[[^]](https://www.mexc.com/news/912291) |
Goldman Sachs Core CPI Inflation Forecast | 2.1% by the end of 2026 [[^]](https://www.thestreet.com/economy/goldman-just-released-its-inflation-playbook-for-the-rest-of-2026)[[^]](https://www.goldmansachs.com/insights/articles/forecasts-for-the-worlds-biggest-economies-in-2026)[[^]](https://www.gspublishing.com/content/research/en/reports/2026/01/11/4d2301ad-a4bc-44a8-b36d-42b47a4b5bd4.html)[[^]](https://www.mexc.com/news/912291) |

**The Cleveland Fed and Goldman Sachs use distinct inflation forecasting methodologies**

The Cleveland Fed and Goldman Sachs use distinct inflation forecasting methodologies. The Cleveland Fed's Nowcast relies heavily on timely, high-frequency data, providing immediate insights into price movements crucial for predicting inflation in the current or very next month or quarter, such as Q3 2026 as it unfolds [[^]](https://www.thecoinrepublic.com/2024/02/17/the-cleveland-feds-reliable-approach-to-inflation-nowcasting/)[[^]](https://www.clevelandfed.org/-/media/project/clevelandfedtenant/clevelandfedsite/publications/working-papers/2024/wp2406.pdf)[[^]](https://www.gspublishing.com/content/research/en/reports/2022/07/04/ac6f20d5-f250-4768-9465-d9a32c5b88d8.html). In contrast, Goldman Sachs' econometric models utilize a broader and more diverse range of macroeconomic and financial data, designed for both immediate and longer-term projections, offering a comprehensive view of the inflation trajectory over horizons extending to year-end 2026 and into 2027 [[^]](https://www.gspublishing.com/content/research/en/reports/2022/07/04/ac6f20d5-f250-4768-9465-d9a32c5b88d8.html)[[^]](https://www.thestreet.com/economy/goldman-just-released-its-inflation-playbook-for-the-rest-of-2026)[[^]](https://www.goldmansachs.com/insights/articles/forecasts-for-the-worlds-biggest-economies-in-2026)[[^]](https://www.gspublishing.com/content/research/en/reports/2026/01/11/4d2301ad-a4bc-44a8-b36d-42b47a4b5bd4.html).

The Cleveland Fed's Nowcast uses real-time, granular data for rapid updates. It synthesizes inputs such as daily oil prices, weekly gasoline prices, and monthly readings of the Consumer Price Index (CPI) and Personal Consumption Expenditures (PCE) price indexes [[^]](https://www.thecoinrepublic.com/2024/02/17/the-cleveland-feds-reliable-approach-to-inflation-nowcasting/)[[^]](https://www.clevelandfed.org/-/media/project/clevelandfedtenant/clevelandfedsite/publications/working-papers/2024/wp2406.pdf)[[^]](https://www.clevelandfed.org/indicators-and-data/inflation-nowcasting). These forecasts are updated daily as new high-frequency data becomes available, allowing for rapid adjustments to emerging economic trends [[^]](https://www.thecoinrepublic.com/2024/02/17/the-cleveland-feds-reliable-approach-to-inflation-nowcasting/). Historically, the Nowcast has shown strong accuracy, frequently outperforming traditional statistical models and professional forecaster surveys for headline CPI and PCE inflation [[^]](https://www.thecoinrepublic.com/2024/02/17/the-cleveland-feds-reliable-approach-to-inflation-nowcasting/)[[^]](https://www.clevelandfed.org/publications/working-paper/2024/wp-2406-nowcasting-inflation)[[^]](https://ideas.repec.org/a/fip/fedcec/95742.html)[[^]](https://www.researchgate.net/publication/369032458_A_real-time_assessment_of_inflation_nowcasting_at_the_Cleveland_Fed).

Goldman Sachs' models incorporate diverse data for detailed inflation projections. Their component-level inflation models integrate measures of labor and product **market** slack, indicators related to the pass-through of commodity, import, and asset prices, and alternative price indices from non-government sources [[^]](https://www.gspublishing.com/content/research/en/reports/2022/07/04/ac6f20d5-f250-4768-9465-d9a32c5b88d8.html). They also factor in consumer and business inflation expectations and the jobs-workers gap [[^]](https://www.gspublishing.com/content/research/en/reports/2022/07/04/ac6f20d5-f250-4768-9465-d9a32c5b88d8.html). For Q3 2026, Goldman Sachs has provided various projections, with core PCE inflation expected to fall to around **2.2%** by December 2026 (excluding tariff effects) and core CPI to **2.1%** by the end of 2026, though some forecasts were revised upwards in March 2026 [[^]](https://www.thestreet.com/economy/goldman-just-released-its-inflation-playbook-for-the-rest-of-2026)[[^]](https://www.goldmansachs.com/insights/articles/forecasts-for-the-worlds-biggest-economies-in-2026)[[^]](https://www.gspublishing.com/content/research/en/reports/2026/01/11/4d2301ad-a4bc-44a8-b36d-42b47a4b5bd4.html)[[^]](https://www.mexc.com/news/912291). While traditional econometric models generally outperform most machine learning algorithms for nowcasting, linear machine learning algorithms like Lasso and Elastic Net can perform exceptionally well when applied to rich high-frequency data [[^]](https://www.imf.org/en/publications/wp/issues/2025/12/05/gdp-nowcasting-performance-of-traditional-econometric-models-vs-machine-learning-572360).

## What Could Change the Odds

**Key catalysts for potentially higher inflation, such as a bullish August 2026 CPI, include stronger-than-expected economic growth, which could boost consumer demand and business investment [[^]](https://www.clevelandfed.org/center-for-inflation-research/inflation-explained-your-guide-to-inflation-basics/what-causes-inflation)[[^]](https://www.rba.gov.au/education/resources/explainers/causes-of-inflation.html)[[^]](https://www.pimco.com/us/en/resources/education/understanding-inflation).** Persistent supply chain bottlenecks or new shocks could also limit goods availability and increase costs [[^]](https://www.raisin.com/en-gb/finance-glossary/cpi/)[[^]](https://www.bls.gov/opub/mlr/2023/beyond-bls/what-caused-inflation-to-spike-after-2020.htm). Additionally, spikes in global oil, natural gas, or agricultural commodity prices would directly impact the CPI [[^]](https://www.raisin.com/en-gb/finance-glossary/cpi/)[[^]](https://www.bls.gov/opub/mlr/2023/beyond-bls/what-caused-inflation-to-spike-after-2020.htm)[[^]](https://www.pimco.com/us/en/resources/education/understanding-inflation), with energy prices specifically noted as a significant driver of CPI increases in recent years [[^]](https://www.raisin.com/en-gb/finance-glossary/cpi/)[[^]](https://www.bls.gov/opub/mlr/2023/beyond-bls/what-caused-inflation-to-spike-after-2020.htm)[[^]](https://www.pimco.com/us/en/resources/education/understanding-inflation). Aggressive wage growth could lead businesses to raise prices [[^]](https://www.bls.gov/opub/mlr/2023/beyond-bls/what-caused-inflation-to-spike-after-2020.htm)[[^]](https://www.rba.gov.au/education/resources/explainers/causes-of-inflation.html), and if people expect prices to rise, they may demand higher wages or raise prices themselves, perpetuating the inflationary cycle [[^]](https://www.imf.org/en/publications/fandd/issues/series/back-to-basics/monetary-policy)[[^]](https://www.clevelandfed.org/center-for-inflation-research/inflation-explained-your-guide-to-inflation-basics/what-causes-inflation)[[^]](https://www.rba.gov.au/education/resources/explainers/causes-of-inflation.html). Expansionary monetary policy, such as central banks cutting interest rates or implementing other stimulus measures, could fuel demand and inflation [[^]](https://www.riksbank.se/en-gb/monetary-policy/what-is-monetary-policy/how-monetary-policy-affects-inflation/)[[^]](https://www.abacademies.org/articles/monetary-policy-and-inflation-analyzing-central-bank-strategies-16919.html). A significant depreciation of the local currency would make imports more expensive, also contributing to higher inflation [[^]](https://www.rba.gov.au/education/resources/explainers/causes-of-inflation.html). Increased consumer spending, rising incomes, or lower borrowing costs can also fuel inflation [[^]](https://www.clevelandfed.org/center-for-inflation-research/inflation-explained-your-guide-to-inflation-basics/what-causes-inflation)[[^]](https://www.rba.gov.au/education/resources/explainers/causes-of-inflation.html), and if businesses face higher input costs, they often pass these on to consumers through higher prices [[^]](https://www.clevelandfed.org/center-for-inflation-research/inflation-explained-your-guide-to-inflation-basics/what-causes-inflation)[[^]](https://www.rba.gov.au/education/resources/explainers/causes-of-inflation.html)[[^]](https://www.pimco.com/us/en/resources/education/understanding-inflation).

**Conversely, bearish catalysts for the August 2026 CPI, indicating lower inflation, involve an economic slowdown or recession, which would reduce consumer and business spending, dampening demand and putting downward pressure on prices [[^]](https://www.forex.com/en-us/trading-guides/the-impact-of-monetary-policy-on-financial-markets/).** Contractionary monetary policy, such as continued high interest rates or further tightening by central banks, would curb demand and cool inflation [[^]](https://www.riksbank.se/en-gb/monetary-policy/what-is-monetary-policy/how-monetary-policy-affects-inflation/)[[^]](https://www.abacademies.org/articles/monetary-policy-and-inflation-analyzing-central-bank-strategies-16919.html)[[^]](https://www.forex.com/en-us/trading-guides/the-impact-of-monetary-policy-on-financial-markets/).

## Key Dates & Catalysts

- **Expiration:** December 11, 2026
- **Closes:** September 11, 2026

## Decision-Flipping Events

- Key catalysts for potentially higher inflation, such as a bullish August 2026 CPI, include stronger-than-expected economic growth, which could boost consumer demand and business investment [^] [^] [^] .
- Persistent supply chain bottlenecks or new shocks could also limit goods availability and increase costs [^] [^] .
- Additionally, spikes in global oil, natural gas, or agricultural commodity prices would directly impact the CPI [^] [^] [^] , with energy prices specifically noted as a significant driver of CPI increases in recent years [^] [^] [^] .
- Aggressive wage growth could lead businesses to raise prices [^] [^] , and if people expect prices to rise, they may demand higher wages or raise prices themselves, perpetuating the inflationary cycle [^] [^] [^] .

## Related Research Reports

- [China overtakes USA’s economy by 2030?](/markets/economics/growth/china-overtakes-usa-s-economy-by-2030/)
- [Costco raises hot dog combo price?](/markets/economics/inflation/costco-raises-hot-dog-combo-price/)
- [Next Fed rate hike?](/markets/economics/fed/next-fed-rate-hike/)
- [US gas prices on Apr 29, 2026](/markets/economics/oil-and-energy/us-gas-prices-on-apr-29-2026/)

## Historical Resolutions

**Historical Resolutions:** 20 markets in this series

**Outcomes:** 13 resolved YES, 7 resolved NO

**Recent resolutions:**

- KXCPI-26MAR-T1.3: NO (Apr 10, 2026)
- KXCPI-26MAR-T1.2: NO (Apr 10, 2026)
- KXCPI-26MAR-T1.1: NO (Apr 10, 2026)
- KXCPI-26MAR-T1.0: NO (Apr 10, 2026)
- KXCPI-26MAR-T0.9: NO (Apr 10, 2026)

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