3.7% in one basket: what US inflation measures, and what the Fed decides on 28 October
Bread, milk, gasoline, rent: the consumer price index is the price of a shopping basket. What was in it in September, why it jumped, and what the Fed's rate decision is about. Compared with the euro area and Hungary.
Inflation is not a number in the news. It is a basket on the kitchen table.
Every month the US Bureau of Labor Statistics (BLS) prices the same imaginary shopping basket: food, gasoline, cars, rent, services. Each item counts according to its share of household spending. That is the consumer price index (CPI). The version for urban consumers covers more than 90% of the US population. (BLS, CPI questions and answers)
The September basket
The new figures came out on 14 October: in September prices rose 0.6% in a month and 3.7% in a year. The average forecast was 3.6%. (First Trust, 14 October 2026; investingLive)
What got more expensive? Almost only energy.
- Energy: +5.2% in a month, +20.4% in a year.
- Gasoline: +9.1% in a month, more than half of the monthly rise on its own. Year on year: +34.2%.
- Food: 0.0% in a month, so unchanged.
- Shelter: +0.4%.
(Trading Economics, 14 October 2026; BLS, 16 October 2026)
"Core" inflation, which leaves out volatile food and energy prices, is 2.6% a year. The rest of the basket is rising far more slowly than the cost of filling the tank. (First Trust, 14 October 2026)
Where does the Fed come in?
The US central bank (the Fed) is charged with price stability. Its main tool is its policy rate: dearer credit slows demand, and over time that slows price rises.
- On 15–16 September the Fed raised rates by 0.25 percentage points, its first hike since 2023. The range for its policy rate is now 3.75–4.00%. (Trading Economics)
- The next decision is on 28 October. (investingLive, 16 October 2026)
- Fed Chair Kevin Warsh said in Bangkok on 16 October that he does not prejudge meetings, that price pressures remain uncomfortably high, and he named the October and December meetings as the decision points. (investingLive, 16 October 2026)
- On 17 October CME FedWatch showed about a 15% chance of an October hike. That is how market participants are pricing it, not a forecast. (Tiger Brokers, 17 October 2026)
Three baskets side by side
| September inflation | August | Central bank rate | |
|---|---|---|---|
| US (CPI) | 3.7% | — | 3.75–4.00% |
| Euro area (HICP) | 3.8% | 3.2% | — |
| Hungary (KSH) | 1.6% | 1.3% | 5.50% |
(Eurostat, 16 October 2026; OTP Flash Report, 8 October 2026; MNB base rate: focus-economics, 25 August 2026.) In the euro area, energy was up 18.9% on the year.
What we do not know
The US August annual figure and the gasoline annual change come from secondary sources; we did not read the KSH or MNB releases themselves. Nobody knows in advance what the Fed will decide on 28 October.
This article is for information only and is not investment advice. Sources: BLS, First Trust, Trading Economics, investingLive, Eurostat, OTP, focus-economics (October 2026).
Continue on DAI
Explore Topics
Written by
Data Analytic Investments
Content creator and writer sharing insights and stories.
