Consumer prices in the US rose more than expected in September. This strengthened expectations of a Fed rate hike and supported the dollar.
Consumer prices in the US rose by 0.6% month-on-month and 3.7% year-on-year in September. The core index, excluding food and energy, increased by 0.3% month-on-month and 2.6% year-on-year. These data exceeded economists' forecasts.
The main contribution to the growth came from energy prices, which jumped by 5.2%. Gasoline rose by 9.1% month-on-month and 34.2% year-on-year. Food prices remained unchanged, while housing and used cars increased by 0.4% and 0.7% respectively.
The dollar reacted with growth. The dollar index rose to 102.79 points, updating the maximum since April 2025. The Bloomberg Dollar Spot index also reached a high since May 2025. Over the past four weeks, the dollar added almost 3%.
The market revised the probabilities of Fed actions. The chance of a rate hike in October rose to 44%, and by the end of the year — above 96%. The money market expects three rate hikes by the end of 2027.
Treasury bond yields rose by more than 6 basis points, approaching 5.3%. Futures on major US indices declined. In commodity markets, gold and silver became cheaper, while oil showed mixed dynamics.
The CPI report was the last before the Fed meeting on October 27–28. The next producer price index data will be released on Thursday, and the personal consumption expenditures index — later in October.