US Inflation Rises 3%, Fed Cut Expected

U.S. consumer prices rose 3.0% year‑over‑year in September and 0.3% month‑over‑month, the fastest annual pace since January and up from 2.9% in August, in a CPI report released after a government shutdown delay. Both headline and core CPI came in slightly below forecasts (3.0% versus 3.1%), with analysts saying muted tariff pass‑through — firms absorbing some higher costs — helped limit the upside. Shelter inflation remained elevated at about 3.6% year‑over‑year, and categories such as medical care, household furnishings, recreation and used cars showed notable gains, suggesting some price pressures could persist into 2026. The delayed release, which is needed to set the 2026 Social Security cost‑of‑living adjustment, has strengthened market and analyst bets that the Federal Reserve will cut rates by 25 basis points at next week’s meeting, though officials are watching the PCE report due Oct. 31. Economists warned the shutdown‑delayed release could raise data‑quality concerns and leave policymakers deciding with a more limited information set, which could affect the timing and size of subsequent cuts.