U.S. consumer inflation came in softer than expected in September, with the Consumer Price Index (CPI) rising 0.3% month over month and 3% year over year, compared with forecasts of 0.4% and 3.1%. The core CPI, which excludes food and energy, also climbed 0.2% on the month and 3% annually, underscoring moderating price pressures.
Energy costs rose 4.1% due to higher gasoline prices, while food prices edged up 0.2%. Shelter costs—the largest CPI component—rose just 0.2%, the smallest gain in several months. Markets reacted positively, with stock futures advancing and Treasury yields dipping as traders priced in a near-certain Fed rate cut next week.
The report offers the Federal Reserve a final key data point ahead of its policy decision. With inflation easing toward the 2% target, markets expect a quarter-point rate cut, followed potentially by another in December.
