Inflation Held Steady in August, Pushing the Fed Towards a Rate Hike

September 11, 2026

AI Summary

5 min read

“If you drove down the highway today you would see diesel prices above six bucks, which is a new record.” That detail from WSJ economics reporter Justin Lahart captured the stubborn reality of inflation in August, which held steady at 3.4% — in line with analyst expectations but well above the Federal Reserve’s 2% target. The reading all but guarantees a rate hike at the Fed’s meeting next week, and it came alongside a flurry of other developments: a report that Iran used Anthropic’s AI to target U.S. Navy ships, a new security program allowing non-travelers past airport gates for the first time since 9/11, and a Republican senator’s criticism of President Trump’s trade war with Canada.

Inflation Stays Hot, Fed Poised to Act

The August inflation report showed prices rising at the same 3.4% annual rate as July, defying hopes for a cooldown. Lahart pointed to three main drivers: surging energy prices tied to the war in Iran, lingering effects from tariffs, and the AI buildout pushing up costs for components like DRAM memory. He noted that Apple’s new $1,999 phone reflected those higher memory costs. “It’s not what the Fed wanted to see this year,” Lahart said.

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What you'll learn

1 (01:17) **August Inflation Holds Steady at 3.4%** - The Labor Department reports inflation remained at 3.4% in August, in line with expectations but above the Fed's 2% target, pressuring the central bank ahead of its meeting next week.
2 (03:51) **U.S. Markets Rally on Rate Hike Expectations** - U.S. indexes added nearly 1% as investors signal approval of a potential rate hike to curb inflation, while oil prices remain volatile.
3 (04:27) **Anthropic Report: Iran Used AI to Target U.S. Navy** - The AI company found an Iranian-linked group used its models to track American warships via transponders and satellite photos, looking for vulnerabilities.
4 (05:08) **Sen. Susan Collins Criticizes Trump's Trade War with Canada** - In an exclusive WSJ interview, the Maine Republican calls the president's tone and rhetoric "inappropriate and unhelpful" as she works to lessen the tariff impact on her state.
5 (06:22) **America Marks 25 Years Since 9/11 Attacks** - Remembrance ceremonies honor the nearly 3,000 victims, with President Trump speaking at the Pentagon and former presidents attending the ground zero ceremony in New York.
6 (07:35) **Post-9/11 Airport Security: Changes and New Evolutions** - WSJ's Alison Sider discusses how security has been standardized and intensified, from taking off shoes to banning non-travelers from gates, but some rules are now being relaxed.
7 Standout Quotes

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Guests on this episode

Alison Sider Susan Collins

Show Notes

P.M. Edition for Sept. 11. New data from the Labor Department show that inflation held steady at 3.4% last month. As Journal economics reporter Justin Lahart explains, that puts pressure on the Fed to raise interest rates at its meeting next week. Plus, Anthropic found that Iran used the company’s AI tools to target U.S. forces in the Middle East. And on the 25th anniversary of the Sept. 11 terrorist attacks, we look at how travel security measures have changed with reporter Alison Sider. Alex Ossola hosts.

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