Global anchor · Economy · Prices
64warm
0.41 percentage points above its 10-year average | Data for Sep 2026
Hot and cold describe position, not good or bad: warm does not mean a fall is coming, and an extreme reading does not mean a quick reversal. We describe history only, with no buy or sell advice.
What it is
Consumer prices compared with the same month a year earlier. The headline reading is for the US; the euro area, Japan, the UK, China, South Korea and India are also shown.
When inflation is above target, central banks tend to raise rates. Inflation is one of the biggest drivers of interest rates and stock valuations.
No official data were published for Oct 2025 (US government shutdown); we filled the gap by linear interpolation between the months before and after.
The headline reading is for the US; the euro-area series was revised in 2026 (COICOP 2018).
Where it stands now
coldcoolneutralwarmhotHatched = earlier periods that were also warm
| Economies | Percentile | Level | Data month |
|---|---|---|---|
| Euro area | 83 | hot | Sep 2026 |
| South Korea | 74 | warm | Sep 2026 |
| Japan | 68 | warm | Jul 2026 |
| China | 65 | warm | Sep 2026 |
| India | 60 | warm | Aug 2026 |
| UK | 50 | neutral | Aug 2026 |
When it was here before
US stocks after it began, cumulative1 yr2 yr3 yr
For each period, the changes 1, 2 and 3 years after it began are cumulative and measured from its first month; “What happened next” is measured from every warm month, so the two give different numbers. The events named beside each period are major events of that time, not necessarily related to the readings here.
What happened next
Bars: median cumulative changeEarlier months with US inflation warm, excluding the current period (141)All months (707)
Median of the deepest drop below the starting month within the next 5 years: −15.6% for months with US inflation warm; −6.9% for all months.
The warm months come from a small number of market episodes (14), and neighboring months are not independent events; rises and falls are all listed. This is the historical record, not a forecast. “US stocks” means the S&P 500 price index compiled by Professor Shiller (monthly average, excluding dividends).
| Median position | Back to neutral (40–60) | Still warm or more extreme | |
|---|---|---|---|
| 1 yr later | 49neutral | 30% | 32% |
| 3 yr later | 53neutral | 26% | 44% |
| 5 yr later | 50neutral | 19% | 43% |
Has hot or cold lined up with later returns?
1967–2021: average yearly change in US stocks over the next 5 years
In this period, the hotter the month, the lower the average over the next 5 years. The months overlap, so there are really only a few market episodes. This is a tendency, not a rule, and not a forecast.
What it is linked to
Supply pressuretoUS inflationCommon explanation: Knock-on · same direction
Clogged supply chains and higher freight costs make goods cost more
This issue: Supply pressure at 91 (hot), US inflation at 64 (warm) — both above normal, in line with the common explanation.
Supported by the dataAgreement +0.45 · in step in 14 of 14 5-year periods
US inflationtoFed funds rateCommon explanation: Cause · same direction
When inflation is above target, the central bank raises rates to cool demand
This issue: US inflation at 64 (warm), Fed funds rate at 72 (warm) — both above normal, in line with the common explanation.
Supported by the dataAgreement +0.53 · in step in 37 of 48 5-year periods
OiltoUS inflationCommon explanation: Knock-on · same direction
Energy is part of consumer prices and a cost of transport and production
This issue: Oil at 72 (warm), US inflation at 64 (warm) — both above normal, in line with the common explanation.
Supported by the dataAgreement +0.53 · in step in 38 of 42 5-year periods
US inflationtoPolicy ratesCommon explanation: Cause · same direction
When a country’s inflation is above target, its central bank raises rates
This issue: US inflation at 64 (warm), Policy rates at 85 (hot) — both above normal, in line with the common explanation.
Supported by the dataAgreement +0.54 · in step in 14 of 14 5-year periods
Natural gastoUS inflationCommon explanation: Knock-on · same direction
Natural gas drives electricity and heating bills (most clearly in Europe)
This issue: Natural gas at 60 (warm), US inflation at 64 (warm) — both above normal, in line with the common explanation.
Weak or inconsistentAgreement +0.39 · in step in 25 of 42 5-year periods
Food pricestoUS inflationCommon explanation: Knock-on · same direction
Food prices push up food inflation (food weighs heavily in emerging economies)
This issue: Food prices at 61 (warm), US inflation at 64 (warm) — both above normal, in line with the common explanation.
Weak or inconsistentAgreement +0.32 · in step in 26 of 42 5-year periods
Values
Data and sources