The consumer price index for August 2025 rose 2.9% on an annual basis. Tariffs seem to be pushing prices for goods like clothing higher, economists said.

American voters often rank inflation as the most important issue facing the US. But something odd has happened to inflationary expectations since Donald Trump became president in January. Americans believe inflation is much higher than it is, and are bracing themselves for further increases.

The 12-month inflation rate edged up to 2.9 percent in August, according to data released last week by the Department of Labor.

The central bank is grappling with how quickly to lower interest rates after restarting cuts on Wednesday, amid mixed economic signals and a relentless White House pressure campaign.

US headline CPI rose to 2.9% year-over-year, up from 2.7% in July - in line with expectations and the highest level since January. Core CPI was at 3.1% year-over-year, unchanged from July.

Wall Street closely watches Federal Reserve meetings, but it's not just the decision on interest rates that makes headlines. The central bank's dot plot is a key quarterly forecast for both investors and economists.

The annual inflation rate increased slightly in May as an uptick in grocery inflation somewhat offset lower prices at the gasoline pump. And while inflation was relatively tame, economists said they expect President Trump's tariff policy to raise consumer ...