Recent U.S. CPI readings, including a May 2026 peak of 4.2% year-over-year driven by energy prices, have kept headline inflation elevated above the Fed’s 2% target, with August at 3.4% and September expected near 3.6-3.7%. The FOMC’s September 25-basis-point hike to the 3.75-4% federal funds range, alongside projections for one more increase this year, reflects upside risks from supply shocks and resilient demand. Core measures remain more contained near 2.9-3.4%, supporting trader views that 2026 highs are unlikely to exceed 4.5%. Key near-term catalysts include the October FOMC meeting and upcoming CPI releases that could shift rate path expectations.