US Inflation Rises to 3.7 Percent in September
US consumer prices rose 3.7 percent year-over-year in September, increasing the likelihood that the Federal Reserve will raise interest rates in October.
U.S. consumer prices increased 3.7 percent year-over-year in September, accelerating from a 3.4 percent increase in August. The monthly Consumer Price Index rose 0.6 percent, a gain driven largely by a 9.1 percent surge in gasoline prices linked to the U.S.-Israeli war with Iran. Core inflation, which excludes volatile food and energy costs, rose 2.6 percent annually, exceeding economist forecasts.
This data has shifted market expectations for the Federal Reserve System, which is scheduled to hold a policy meeting on October 27-28. Market probabilities of an interest rate hike jumped from 22 percent to approximately 52 percent following the report. The central bank previously raised its benchmark rate in September to a range of 3.75 percent to 4.00 percent.
In a related development, the Social Security Administration announced a 3.6 percent cost-of-living adjustment for 2027 benefits.
