Consumer prices rose 3.7% annually in September as gas prices skyrocket — SkimNews
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- Consumer Price Index rose 0.6% month-over-month in September, pushing the 12-month rate to 3.7% (vs. 3.6% expected) and marking the final CPI reading before the Fed's Oct 27-28 FOMC meeting.
- Gasoline prices jumped 9.1% in September—accounting for roughly half the headline CPI gain—while fuel oil soared 74.2% over the past year; the BLS tied the energy spike to tensions from the U.S.-Iran war launched in late February.
- Core CPI rose 0.3% monthly and 2.6% annually, but Carson Group's Sonu Varghese noted core inflation ran at a 3.7% annualized pace, saying 'investors keep getting surprised by broad-based inflation.'
- Federal Reserve officials approved their first rate hike in over three years in September (25 bps to 3.75%-4%); futures traders now price ~54% odds of another hike at the Oct 27-28 meeting and >96% odds of a rate rise by year-end.
- Stock market futures turned negative and bond yields rose sharply after the release, reflecting an immediate market repricing toward tighter monetary policy.
- Shelter, used cars, and apparel prices also climbed—0.4%, 0.7%, and 0.3% respectively—with the article flagging apparel as sensitive to President Trump's tariffs and broader demand pressures tied to the AI build-out.
Why it matters: Consumers are paying sharply more at the pump—gas up 34.2% over the past year—while the Federal Reserve, after its first rate hike in three years last month, now faces near-certain pressure to hike again at the Oct 27-28 meeting, with futures pricing >96% odds of a rate rise by December and a roughly 50-50 chance of a half-point move.
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