Will U.S. inflation be 4% or higher in the November 2026 CPI report?

The decision that matters most here is not at the Fed but in the White House: whether to accept a deal that reopens the Strait of Hormuz. President Trump has said oil prices will be "tumbling downward" right after the election, and Reuters, citing the Wall Street Journal, reports he rejected Iran's seven-day plan and told staff a renewed bombing campaign is likely. His record since February has been to pair pressure on Iran with promises that relief is coming, while declining to accept Iranian terms that would read as a concession. That points to prices staying high through November rather than a sudden drop.

Iran's incentive is the mirror image: the strait is its main leverage, and it has offered to reopen it only in exchange for lifting the blockade, releasing frozen funds and waiving oil sanctions. Neither side can easily be seen to blink before the U.S. midterms on November 3, and the November CPI survey period falls around that date.

Congress and the administration have already used most of the fast tools: a historic Strategic Petroleum Reserve release has left the reserve at its lowest since the early 1980s, and a federal gas tax holiday needs a vote Congress has not taken. The remaining levers are slow.

Reference class: the change in the unadjusted CPI index from September to November in each year from 1990 to 2024. We need roughly a 0.13% rise over those two months if September prints 3.6% as markets expect. That happened in 19 of 35 years, or 54%. Since 2001, when fall gasoline declines became larger, it happened in only 8 of 24 years, or 33%. The years that cleared the bar, such as 2004, 2007, 2021 and 2022, were years when gasoline rose or held up in the fall.

Closest analogue: this year itself. When gas peaked at $4.56 on May 21, 2026, annual CPI inflation peaked at 4.2% in May. Gas is back near $4.49. The analogy breaks on the base: the index rose about 0.8% between May and November 2025, so the same gas price produces a lower annual rate in November than it did in May.

Second analogue: 1990, when the Gulf crisis kept oil high into the fall and the CPI rose 0.83% from September to November. Where it breaks: core inflation was far higher in 1990, while today core CPI is 2.4%, the lowest since March 2021, so almost all the pressure has to come from energy.

The arithmetic. The November 2025 index was 324.122, unusually below September 2025 after the shutdown-era gap in BLS data. A 4.0% reading, after rounding, needs a November 2026 index of about 336.93. August 2026 stood at 334.98, so prices must rise about 0.58% over three months before seasonal adjustment. If September prints 3.6%, the index is near 336.5, and October and November together must add only about 0.13%.

Start from a blended base rate of 45%, between the 54% full-sample and 33% post-2001 frequencies. Up 6 points because pump prices are already about 4% above September's $4.30 average, which lifts October mechanically, and because the Iran peace plan was rejected. Down 6 points for soft core inflation and the usual autumn decline in gasoline demand and the switch to cheaper winter-blend fuel.

45 plus 6 minus 6 lands at 45%. A Hormuz reopening before mid-November would cut this to roughly 20%; renewed strikes that lift Brent toward $120, a level HSBC and Goldman Sachs have flagged, would push it above 70%.