Key Takeaways
Forecasters expect inflation to accelerate in the last part of the year as more companies pass the costs of President Donald Trump’s tariffs on to customers.
A survey of professional forecasters called for a the Consumer Price Index to rise 3% over the year in the fourth quarter, an acceleration from 2.9% in August.
Some economists expect inflation to peak in December and then fade in 2026 as tariff-related price hikes cease.

Economists expect inflation to keep climbing in the fourth quarter, as President Donald Trump’s tariffs continue to push up prices for everyday goods.

Most mainstream forecasts call for inflation to accelerate in the fourth quarter, as companies pass on the cost of Trump’s sweeping new import taxes on to their customers. The Consumer Price Index is expected to rise 3% over the year in the fourth quarter, according to an August survey of professional forecasters by the Federal Reserve Bank of Philadelphia. That would be a tick up from the 2.9% annual CPI inflation in August, and the highest since May 2024.

Inflation is just below 3% by several measures. Consumer prices as measured by Personal Consumption Expenditures rose 2.7% over the year in August, up from 2.6% in July, the Bureau of Economic Analysis said Friday. “Core” PCE, which excludes volatile prices for food and energy, and is considered a more reliable indicator of broad inflation trends by economists, rose 2.9% annually in August, the same is in July.

How This Could Affect Your Finances

Inflation has a major and obvious effect on household budgets, especially when it comes to necessities like gas and groceries. Although by some measures, average wages have kept up with inflation since the pandemic, the pay increases haven’t been shared equally among Americans, and more households are struggling to keep up with their bills.

The cost of imported items is rising as a result of tariffs, which are meant to encourage companies to locate factories in the U.S. Companies have been reluctant to pass costs on to consumers for fear of losing business, but according to surveys, more are planning to do so in the coming months.

A major question is how much of the double-digit tariffs, which vary by country and by sector, will be passed on to consumers. Companies were passing through 70% of the costs to consumers, the Yale Budget Lab found in an analysis in June. However, because some companies have reported delaying price increases, there may be more tariff-related inflation in the months ahead.

How Long Will Tariff Inflation Last?

Some economists see the tariff impact as significant but temporary. Forecasters at Goldman Sachs estimate inflation as measured by Personal Consumption Expenditures (excluding food and energy) will rise 3.2% over the year in December, up from 2.9% in August. That would be the highest inflation reading since August 2023, but Goldman then expects it to start to fall in 2026.

That’s a significant contrast to the past few years, when inflation has generally fallen. Inflation surged to a 40-year high in the aftermath of the pandemic, peaking in June 2022 at a rate of 9.1%, and then falling after the Federal Reserve raised interest rates to combat price hikes. Inflation has faded in some key categories such as rent, while prices for imports have risen, Fed officials noted in speeches this week.

The Fed cut its key interest rate last week for the first time in 2025, citing weakening conditions in the labor market. Forecasts from Fed officials indicate that more rate cuts are possible, though rising inflation could keep the central bank from cutting as quickly or aggressively as investors hope. The Fed has a dual mandate to promote high levels of employment and stable prices.