US inflation to hit 3.6% in September? Why CPI data matters for Fed rate decision
US inflation may rise to 3.6% in September as gas prices climb. The CPI report could shape the Fed's October rate decision and rate hike outlook.
The US Consumer Price Index (CPI) report is due on Wednesday, October 15, and experts predict that inflation will have increased in September due to rising energy prices. Economists surveyed by Bloomberg forecast that annual US inflation will reach 3.6% in September, up from 3.4% in August. Consumer prices are expected to rise by 0.6% in September, faster than the 0.4% increase seen in August.
Gasoline prices are anticipated to be a major contributor to the inflation surge, with the average price hitting a record $4.33 per gallon last month. Core inflation, excluding food and energy prices, is also projected to increase slightly in September to 2.5%, up from 2.4% in August. If core inflation aligns with expectations, the Federal Reserve may maintain unchanged interest rates at its October 28 meeting.
Policymakers will consider other economic data before deciding. Recent Federal Reserve comments have been mixed, highlighting the difficulty of reducing inflation without harming the economy. Traders believe there is a 76% chance the Fed will keep rates unchanged at the October meeting.
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