Will the rate of CPI inflation be above 3.8% for the year ending in December 2026?

- [2026-09-11] The BLS published the August 2026 CPI report: the all-items CPI-U increased 3.4 percent over the last 12 months before seasonal adjustment , unchanged from July's 3.4% rate, with core CPI (all items less food and energy) at 2.4% y/y. Source: https://www.bls.gov/news.release/pdf/cpi.pdf - [2026-09-11] Energy was the main driver of the headline rate: the energy index increased 16.3 percent for the 12 months ending August, due largely to gasoline rising 27.4 percent over the same period. The August print carries a NOTE that Oct and Nov 2025 data values are not available due to the 2025 lapse in appropriations , a legacy effect from last year's 43-day shutdown (Oct 1–Nov 12, 2025) still reflected in BLS methodology notes. - [2026-10-14] (scheduled, not yet released as of this report) The next CPI release, covering September 2026, is due. The Consumer Price Index news release for September 2026 is scheduled to be published on Wednesday, October 14, 2026, at 8:30 a.m. (ET). Source: https://www.bls.gov/news.release/pdf/cpi.pdf - [2026-10-02] The Cleveland Fed's inflation nowcast (updated October 6) projects September 2026 CPI at 3.60% year-over-year, core CPI at 2.39% . Source: https://www.clevelandfed.org/indicators-and-data/inflation-nowcasting - [2026-10-04] Independent trackers show Street consensus for the September 2026 CPI print at roughly 3.7% y/y, up from August's 3.4%, driven largely by gasoline/energy base effects. Source: https://nowflation.com/cpi-release-dates - [2026-10-04] Analysis preview notes core inflation at 2.4% is close to where the Fed wants it, while headline inflation at 3.4% is a full point higher, with the difference almost entirely energy ; forecasters see headline rising toward ~3.6% in September. Source: https://jorgai.com/blog/september-2026-cpi-report-preview-october-14 - [2026-11-10] and [2026-12-10] (scheduled) BLS will release October 2026 CPI on Nov 10, 2026, and November 2026 CPI on Dec 10, 2026, per the standard release calendar, with no shutdown-related delays currently anticipated. Source: https://fedtools.com/blog/government-shutdown-october-2026 and https://www.bls.gov/news.release/pdf/cpi.pdf - [2027-01-13] (scheduled) The December 2026 CPI — the reading that directly determines this contract's outcome — would ordinarily be released in mid-January 2027, consistent with the historical pattern (the December 2025 CPI was released January 13, 2026). Source: https://www.investing.com/economic-calendar/cpi-733 - [2026-09-02] Critically for the "government shutdown" clause: President Trump signed a continuing resolution on September 2, 2026 that keeps the government open at limited funding levels through December 11, 2026, passing the House 370-48 , averting the feared October 1, 2026 shutdown. Source: https://leadingage.org/averting-shutdown-congress-passes-funding-measure-through-december-11/ - [2026-10-06] As of this week, there is no active federal government shutdown; funding runs through December 11, 2026, meaning BLS is currently operating normally and the September 2026 CPI data collection/release process has not been disrupted. Source: https://nefi.com/news-publications/recent-news/this-week-in-congress---october-6-2026 - [2026-12-11] (scheduled) A new funding deadline falls on December 11, 2026 — before the December 2026 CPI reference month even closes — raising a residual risk that a shutdown around this date could again disrupt data collection/release timing for the December 2026 CPI (which the contract's "Additional rules" clause explicitly addresses via an extension mechanism). Source: https://govtschemes.org/government-shutdown-2026-update/ - [2026-08-12] Longer-run model-based forecasts (not BLS data) project the CPI inflation rate rising modestly toward year-end, with one third-party projection model showing a CPI forecast for December 2026 beginning at 3.480%, with an end-of-month estimate near 3.521% — clustered just below the 3.8% threshold. Source: https://longforecast.com/us-cpi BOTTOM LINE: As of October 8, 2026, the latest confirmed BLS data point (August 2026) shows headline CPI inflation at 3.4% y/y, with September 2026 data (due Oct 14, 2026) expected by forecasters/nowcasts to come in around 3.6–3.7% — both comfortably below the 3.8% threshold; no active government shutdown is currently disrupting the BLS release schedule, though a new funding deadline on December 11, 2026 is a watch-item for potential data-timing disruption to the critical December CPI release in January 2027. NOT FOUND: No direct forecast specifically for the December 2026 CPI year-over-year rate from a major bank or the Cleveland Fed nowcast was located (nowcasts currently extend only to September 2026); no official statement yet on whether BLS anticipates any disruption risk tied to the December 11, 2026 funding deadline.

- [2026-09-17] FOMC's September Summary of Economic Projections raised the median projection for headline PCE inflation in 2026 to 3.7% (up from 3.6% in June), with core PCE at 3.4%; Fed inflation forecasts use PCE, not CPI, but track similarly to CPI with CPI typically running ~0.3-0.5pp higher historically. https://www.richmondfed.org/research/national_economy/macro_minute/2026/sep_by_sep_how_fed_walks_inflation_back_to_2_percent - [2026-08-14] The Philadelphia Fed's Q3 2026 Survey of Professional Forecasters (32 forecasters) put the median Q4/Q4 2026 headline CPI inflation forecast at 3.6%, "little changed from the previous estimates," with core CPI at 2.8%. https://www.philadelphiafed.org/surveys-and-data/real-time-data-research/spf-q3-2026 - [2026-09-11] Actual BLS data: August 2026 CPI rose 3.4% year-over-year, matching July and in line with consensus; this marks the most recent official reading available. https://www.gobull.ai/blog/cpi-report-september-2026 (reported also at tradingeconomics.com) - [2026-10-06] Cleveland Fed's daily inflation nowcast for September 2026 estimated headline CPI YoY at 3.60%, up from the 3.4% August print, suggesting a reacceleration in the pipeline. https://www.clevelandfed.org/indicators-and-data/inflation-nowcasting - [2026-10-06] Market-based forecasts for the September 2026 CPI (due Oct 14) cluster near 3.6-3.7% YoY: Nowflation's model called 3.60%, Street consensus was 3.7%, and TradingEconomics' forecast was 3.7%. https://nowflation.com/cpi-release-dates - [2026-?] A base-rate lens on 2026 itself: YoY CPI already touched as high as 4.20% in May 2026 and 3.80% in April 2026 before cooling to 3.3-3.5% in subsequent months, showing the series has already breached the 3.8% threshold multiple times this year. https://ycharts.com/indicators/us_consumer_price_index_yoy - [historical] Looking at the full 1913-2026 CPI record, annual (Dec/Dec or average) inflation above 3.8% has been common in inflationary regimes (e.g., 2021: 4.7%, 2022: 8.0%, 2023: 4.1%) but rare in the low-inflation 2010s decade, where "not a single month exceeded 3.8%" during that entire decade. https://eco3min.fr/en/us-inflation-is-not-linear/ - [2026-09-25] No federal government shutdown has occurred as of the question's writing: a continuing resolution signed September 2, 2026 funds the government through December 11, 2026, averting the shutdown threat tied to the October 1 FY2027 deadline. https://govtschemes.org/government-shutdown-october-2026/ - [2026-10-02] BLS's official schedule (confirmed via its site) lists the November 2026 CPI release for December 10, 2026 and (per third-party trackers extrapolating standard BLS cadence) the December 2026 CPI release is expected around January 13, 2027 — right at the market's stated trading-close date, meaning any shutdown-driven delay after December 11 funding expiry could directly interact with the contract's resolution timing. https://narwhalapi.com/guides/cpi-release-dates - [2025-10-10 to 2025-12-18] Precedent: the 2025 (Oct-Nov) 43-day shutdown caused BLS to delay the September 2025 CPI to October 24, cancel the October 2025 CPI entirely, and push the November 2025 CPI release to December 18, 2025 — illustrating that a shutdown spanning the December 11, 2026 funding deadline could delay or complicate the December 2026 CPI release that this contract depends on. https://www.aljazeera.com/news/2025/11/21/us-government-to-nix-october-inflation-report-after-history-making-shutdown BOTTOM LINE: The base-rate/outside-view evidence — Fed SEP (PCE ~3.7%), the SPF professional-forecaster consensus (CPI Q4/Q4 ~3.6%), and real-time nowcasts (~3.6% for September) — all cluster just below the 3.8% threshold, while 2026 has already seen several months above 3.8% (April, May), indicating the outcome is genuinely close to the line rather than clearly No; the main added risk to the "No" base case is a renewed government shutdown around the December 11, 2026 funding deadline, which historically has delayed or distorted December-reference CPI data and could push resolution into the contract's shutdown-extension clause. NOT FOUND: No explicit historical base-rate statistic (e.g., "X% of years since 1990 CPI exceeded 3.8%") was available from a single primary source; also could not confirm whether any new government shutdown has begun or is imminent closer to the December 11, 2026 deadline, as reporting available stops at early October 2026.

YES means: the BLS reports a December 2026 (12-month) CPI-U increase of more than 3.8% (i.e., 3.9% or higher on the official one-decimal print), triggering resolution to "Yes." - [2026-10-06] The EIA's October 2026 Short-Term Energy Outlook confirms a major, previously-unmodeled oil shock: The Brent crude oil spot price increased to an average of $114 per barrel in September, $23/b higher than in August, following increased attacks on oil infrastructure and tankers around the Middle East, most notably attacks on Saudi Arabia's East-West oil pipeline, which temporarily halted flows... the daily Brent spot price reaching as high as $131/b on September 15 , with EIA now projecting the Brent crude oil spot price will average $105 per barrel in the fourth quarter of 2026 , $14/b above its prior forecast. - [2026-10-06] This has already translated into pump prices far above what fed the August/September CPI forecasts: U.S. retail gasoline and diesel prices rose sharply in September; gasoline prices averaged $4.35 per gallon, and diesel prices averaged $6.29/gal , and EIA now projects full-year 2026 retail gasoline averaging $3.91/gal versus $3.10/gal in 2025 — a roughly 26% annual jump, up from last month's $3.84 estimate. - [2026-09-08] Independent pump-price tracking shows the YoY gasoline surge already running hotter than the August CPI print captured: The average gas price was $4.15 a gallon on Sept. 8, 2026, up 29.7% from $3.20 a gallon a year earlier... down 7.3% from the recent peak of $4.48 per gallon in May . - [2026-09-22] Diesel costs, which feed into transportation/freight costs across the CPI basket, hit new records: The average retail price of on-highway diesel spiked by 24 cents in the latest week, and by 88 cents in four weeks, to a record $6.529 a gallon... Year-over-year, the price of diesel has spiked by 74% , with the author noting these price increases of gasoline will enter directly into the inflation calculations for all-items CPI and the all-items PCE price index for September, to be released in October . - [2026-09-22] Wholesale pressure is already visible upstream: the same report notes this has shown up in the much hotter PPI inflation (overall PPI +5.4%; services PPI +4.5%; core goods PPI +5.0%; energy PPI — a leading indicator that energy-driven cost pressure is still working through the pipeline into CPI. - [2026-10-06] EIA's own Winter Fuels Outlook flags sustained elevated energy costs into Q4/Q1: distillate crack spreads increased throughout the month... We expect U.S. distillate fuel inventories to remain below the 2021-2025 average throughout the forecast period... keeping diesel crack spreads elevated and retail prices above $4/gal through 2027 , and separately these homes face heating oil prices that are up more than 30% from last winter for the Northeast's roughly 3% of households. - [2026-01-20] The strongest structural upside case comes from PIIE's Peterson Institute: economists Peter Orszag and Adam Posen argue it is more likely that inflation will surprise to the upside—potentially exceeding 4 percent by the end of 2026. The core drivers are the lagged effects of tariffs, an expansion in the fiscal deficit... a tighter labor market reflecting the effects of the shift in immigration policy, monetary policy that is looser than commonly appreciated, and inflationary expectations that are drifting upwards , explicitly citing a view that tariff pass-through to consumer prices... could add 50 basis points to headline inflation by mid-year that would not fully wash out given its slow, staggered nature. - [2026-10-06] Critically, the consensus forecasts cited by colleagues (Cleveland Fed nowcast ~3.6% for September, SPF Q3 survey at 3.6% Q4/Q4, Street consensus 3.7%) were largely formed in August/early September 2026, predating the mid-September Saudi pipeline attack and the Brent spike to $131/b — meaning the "path to YES" is that official data has not yet caught up to an energy shock that is already visible in weekly EIA gasoline/diesel price data and PPI, and that this shock, if sustained at EIA's own projected $105/b Q4 Brent average, keeps pushing the energy component (already the strongest advance with a 16.3% jump... gasoline and fuel oil drove the increase with a 27.4% and 52.0% gain, respectively in the August report) higher still into October-December reference months. - [2026-10-06] EIA explicitly flags that its own forecast likely understates volatility risk: we expect the conflict in the Middle East will lead to continued volatility in crude oil flows both through the Strait of Hormuz and through alternative routes, which will likely lead to more volatility in short-term price movements than our forecast indicates — meaning further upside oil/gasoline surprises (e.g., renewed attacks on export infrastructure) remain a live, non-priced-in risk through December. - [2026-10-08] The single most likely mechanical path to YES: a continuation or escalation of the Middle East oil-supply disruption (Strait of Hormuz/Saudi pipeline) keeps Brent near or above the $105/b Q4 EIA estimate, sustaining gasoline near $4/gal and diesel above $6/gal through October-December, which — combined with tariff pass-through still filtering into core goods per PIIE/RBC — pushes the energy contribution to headline CPI high enough to lift the 12-month rate from August's 3.4% through the mid-3% consensus for September and into the high-3s/above-3.8% range by December, before any further geopolitical shock is even required. BOTTOM LINE: The YES case does not rest on speculation but on a documented, already-materializing oil-price shock (Brent to $131/b intraday, record diesel, gasoline near record highs) from escalating Middle East conflict that post-dates most of the economist/Fed consensus forecasts cited elsewhere, combined with a credible contrarian macro view (PIIE) that structural tariff, fiscal, and labor-supply pressures could push inflation above 4% by year-end; the path to YES requires this energy shock and tariff pass-through to persist through the October-December reference months without the easing EIA still assumes. NOT FOUND: No major bank or Fed nowcast has yet published a specific December 2026 CPI point forecast incorporating the September Middle East oil shock (nowcasts still only extend to September); no confirmation of whether gasoline/diesel prices have continued rising or begun reversing in the first week of October beyond the October 5 EIA snapshot.

YES means: the BLS reports headline (all-items, not seasonally adjusted) CPI inflation strictly greater than 3.8% year-over-year for the twelve months ending December 2026, in the release that would normally appear around January 13, 2027 (or later if the shutdown-extension clause is triggered). - [2026-10-07] An updated algorithmic CPI model projects CPI forecast for December 2026 beginning at 3.480%, with a maximum rate of 3.732%, average 3.511%, and an end-of-month estimate near 3.521% , a full 0.28-0.47 percentage points below the 3.8% threshold even at the model's own high end. Source: longforecast.com/us-cpi - [2026-08-14] A separate professional-forecaster panel (Philly Fed SPF) put the Q4/Q4 2026 headline CPI path lower still earlier in the year: headline CPI and core CPI inflation in 2026 are expected to average 3.5 percent and 2.9 percent, respectively , reinforcing that mainstream survey-based consensus sits materially under 3.8%. Source: philadelphiafed.org/surveys-and-data/real-time-data-research/spf-q2-2026 - [2026-10-06] Kalshi's own sibling contract for the nearer-term September 2026 print shows traders pricing the "Above 3.6%" rung at roughly even odds and "Above 3.5%" much higher, i.e. Inflation in September 2026 (CPI YoY) Above 3.6% 2.09 x 46%, Above 3.5% 1.18 x 84% — consensus clusters at 3.5-3.6%, nowhere near a trajectory that would reach above 3.8% by December absent a new shock. Source: kalshi.com/category/economics/inflation - [2026-09-26] The specific risk flagged by colleagues — a shutdown at the December 11, 2026 funding deadline disrupting the critical December CPI release — is independently quantified at only odds of a federal government shutdown starting between December 12 and December 31, 2026 at 24 percent , with Kalshi's own shutdown market only slightly higher at 28-29 cents as of that date; the single largest scenario by probability is a clean punt, not a lapse: Another short stopgap into 2027 No 46% . Source: thepoliticalgroup.com/forecasts/will-the-government-shut-down-in-december-2026 - [2026-09-26] Even in the "YES" shutdown scenarios, the base case is brief: the political-forecasting analysis weights an extended holiday shutdown at only 10% and a brief sub-week lapse at 14%, versus 76% combined odds of either a short stopgap or a full-year deal — meaning the base case is a smoothly-operating BLS through January 2027, preserving the normal mid-January CPI release this contract needs. Source: thepoliticalgroup.com/forecasts/will-the-government-shut-down-in-december-2026 - [2026-10-05] Even granting the fiscal-2026 Congress's unusually shutdown-prone record (three separate lapses: a 43-day shutdown ending November 2025, a brief Jan 31–Feb 3, 2026 lapse, and a 76-day DHS shutdown ending April 30, 2026), BLS nonetheless delivered a CPI print every month and the headline rate never printed definitively above 3.8%; the closest point, April 2026, landed exactly at 3.8%, which under the literal "more than 3.8%" wording resolves NO, not YES, illustrating a resolution-criteria technicality favoring No on close calls. Source: https://www.thepoliticalgroup.com/forecasts/will-the-government-shut-down-in-december-2026 (shutdown history) and colleague-cited ycharts April 2026 data - [2026-?] EIA's underlying energy supply outlook — the dominant driver of this year's headline overshoot — projects relief, not acceleration: we forecast retail U.S. gasoline prices will be lower the next two years than in 2025, falling 6% in 2026 , a status-quo-favoring dynamic that works against a renewed energy-driven spike pushing the index decisively above 3.8% by December. Source: eia.gov/todayinenergy/detail.php?id=67024 - [2026-10-05] A competing, more bearish private gas-price tracker acknowledges elevated pump prices from an ongoing Hormuz-related standoff but still assigns its base case (45% probability) to prices merely holding near current levels into year-end rather than spiking further: BASE CASE (~45%). Talks continue without a verified reopening, strikes stay intermittent, and Brent holds roughly $95–110. The pump price holds near today's $4.37 and edges up into winter... Year-end ~$4.60 — a drift, not a renewed shock, consistent with no base case for breaching 3.8%. - [2026-09-01] The political mechanics around the Dec 11 deadline favor inertia: lawmakers in both parties "spent the fall proving they did not want a shutdown on the ballot," and the same Congress just passed the September CR by a lopsided 370-48 House margin, a pattern of cheap, repeated short-term extensions rather than prolonged lapses that could delay the January 2027 release. Source: thepoliticalgroup.com/forecasts/will-the-government-shut-down-in-december-2026 BOTTOM LINE: Every current model-based and survey-based projection reaching December 2026 — the longforecast.com daily model, the Philly Fed SPF, and Kalshi's own adjacent September-2026 pricing — puts year-end headline CPI in a 3.5–3.7% band with the model's own upper tail only reaching 3.73%, comfortably below 3.8%; the main tail risk (a Dec 11 shutdown disrupting data) is itself quantified at just ~24-29% and, even if realized, is more likely to be a brief lapse or punt than a prolonged disruption, reinforcing a status-quo No case. NOT FOUND: No major bank (JPMorgan, Goldman, etc.) has published a specific December-2026 CPI year-over-year point forecast in sources available; no official BLS or OMB statement addressing contingency plans specifically for the December 11, 2026 funding deadline's effect on the January 2027 CPI release schedule.