US CPI forecast at 3.4% as tariff risks build

Truflation has forecast that annual U.S. headline inflation will remain at 3.4% in August as higher gasoline prices, tariffs and producer costs threaten to keep price pressure above the Federal Reserve’s target. Summary Truflation expects headline CPI to rise 0.3% monthly and remain at 3.4% annually. Core CPI is forecast to increase by 0.2% monthly and slow to 2.4% annually. Gasoline prices rose 3.4% in August, adding fresh pressure to headline inflation. Truflation’s forecasts have deviated from BLS releases by an average of 0.09 percentage points. Truflation said in its August inflation report that the softer July CPI reading was driven mainly by falling energy prices rather than a clear easing of underlying costs. The company expects the reversal of that energy decline, along with tariffs and higher input prices, to shape Friday’s Bureau of Labor Statistics release. The Cleveland Federal Reserve and market consensus also forecast an annual headline CPI of 3.4% and a core CPI of 2.4%. However, both expect headline prices to rise 0.4% from July, compared with Truflation’s 0.3% estimate. All three forecasts place monthly core inflation at 0.2%. July headline CPI rose 0.1% month ove...