US consumer inflation accelerated in September, with the consumer price index rising a seasonally adjusted 0.6% for the month and 3.7% year over year, above the 3.6% annual consensus. Core CPI, which excludes volatile food and energy prices, increased 0.3% monthly and 2.6% annually, also above economist forecasts. The Bureau of Labor Statistics said the gasoline index jumped 9.1% and accounted for more than half of the monthly increase, while the broader energy index rose 5.2%. Shelter costs climbed another 0.4%, though food prices were unchanged.
The hot inflation print immediately pressured risk assets. Bitcoin dropped roughly $1,000 after the release to about $82,800, and CoinMarketCap later showed BTC near $82,903 with a 24-hour range between $82,283 and $84,049. The move came alongside a broader macro repricing: the 10-year US Treasury yield rose to 5.308%, the 2-year yield jumped to 4.924%, Nasdaq 100 futures fell 0.65%, S&P 500 futures slipped 0.3% and gold fell 1.5% to $4,116 per ounce.
Markets also revised Federal Reserve expectations. Before the data, CME Group's FedWatch Tool had assigned roughly a 22% probability to a rate hike at the Fed's October 27-28 meeting; afterward, the odds rose to about 43%. The central bank raised its benchmark rate last month to a range of 3.75% to 4.00% and has signalled more increases may be needed. Economists were divided on the immediate policy response: RSM US chief economist Joseph Brusuelas said the data pointed toward more than one additional hike, though he was not convinced it would force the Fed to move in October rather than December. Capital Economics' Stephen Brown said the broad-based core upside brought an October hike back into play. The next Federal Reserve policy check will be the September personal consumption expenditures price index, due later this month.
