US Inflation Accelerates, Fed October Hike Odds Double — SkimNews
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- U.S. consumer prices accelerated in September, with headline CPI rising 0.6% and core CPI up 0.3%; a 9.1% surge in gasoline prices accounted for more than half the headline increase, and the U.S.-Israeli war with Iran is driving energy costs higher.
- Year-over-year inflation climbed to 3.7% in September from 3.4% in August, while core CPI rose to 2.6% from 2.4% — still well above the Fed's 2% target tracked via core PCE inflation, which was at 3.0% in August.
- Financial markets raised the implied probability of a Fed rate hike at the October 27-28 meeting to roughly 52% from about 22% before the CPI report, per CME Group's FedWatch Tool, after odds had faded on underwhelming September payrolls and cooler July-August PCE readings.
- The Federal Reserve raised its benchmark rate by 25 basis points to the 3.75-4.00% range in September — its first hike in three years — and economists had expected the next move to come in December rather than this month.
- A Reuters/Ipsos poll found 78% of Americans blame Trump's policies, including tariffs on imports and the Middle East conflict, for rising prices outpacing wages, adding to deteriorating consumer sentiment and a slide in Trump's approval rating ahead of the Nov. 3 midterms.
- The Social Security Administration announced a 3.6% cost-of-living adjustment for Social Security and Supplemental Security Income benefits in 2027, directly tied to the September CPI reading.
- Shelter costs rose 0.4% and airline fares climbed 1.2% on higher jet fuel, while used car and truck prices increased 0.7% — evidence that price pressures are broadening beyond energy.
Why it matters: The September report flipped the Fed calculus in a single morning: implied odds of an October rate hike more than doubled from roughly 22% to about 52%, and with 78% of Americans blaming Trump's tariffs and Middle East policy for prices outpacing wages, the inflation print hands Democrats fresh ammunition with the Nov. 3 midterms days away.
Ask SkimNews
