US CPI Up 3% in September; Fed Cut Likely

The delayed Bureau of Labor Statistics CPI report showed consumer prices rose 0.3% month‑over‑month and 3.0% year‑over‑year in September, with core CPI roughly 3.0%. Gasoline was the largest monthly contributor (about +4.1%), while shelter inflation eased (+0.2%) and food rose modestly. The report was produced after key BLS staff were recalled during the government shutdown to compute Social Security’s cost‑of‑living adjustment, which the Social Security Administration used to set a roughly 2.8% COLA for beneficiaries. Tariffs and import levies are beginning to pass through into higher prices for apparel, furniture and large appliances, though firms’ pre‑tariff inventories have muted full passthrough so far. Economists and markets treated the softer‑than‑expected read as compatible with a roughly 25‑basis‑point Federal Reserve rate cut next week amid weak job gains and shutdown‑related data gaps. Some forecasters warned that continued monthly gains could push annual inflation toward about 4% by year‑end.