The US September CPI annual rate rises to the fastest pace in five months; Core CPI exceeds expectations

Driven by rising fuel costs, the overall U.S. CPI annual rate in September increased at its fastest pace in five months, while the core CPI also rose more than expected, continuing to squeeze household budgets ahead of the midterm elections in November. The report indicates that the economy—and especially prices—will remain a focal point before the November 3 midterm elections. This also helps explain why the market expects the Federal Reserve to raise interest rates again in the coming months, even if it chooses to hold steady at the upcoming policy meeting. This is the last inflation data before the Federal Reserve’s October meeting; in addition, Federal Reserve’s Waller will deliver a speech at the IMF meeting in Bangkok on Thursday evening New York time.