US September Inflation Rises 0.3% Amid Gasoline Price Increase

Despite the ongoing U.S. government shutdown, key economic data such as the September Consumer Price Index (CPI) was released, showing a slower-than-expected inflation increase of 0.3% for the month and a 3.0% rise over the past year, with gasoline prices being a significant factor. While inflation has eased from its 2022 peak, regional gasoline prices vary considerably, with the West experiencing the highest costs. Market tensions eased following confirmation of a meeting between President Trump and Chinese President Xi Jinping, which helped lift U.S. tech stocks amid ongoing trade negotiations. Meanwhile, a Boston Fed paper warned of a potential de-anchoring of inflation expectations reminiscent of the 1970s, suggesting that rising household inflation expectations could fuel a wage-price spiral, though this theory faces skepticism regarding its assumptions about worker behavior. The Federal Reserve remains cautious on interest rate cuts amid these inflation trends, with Fed Chairman Jerome Powell favoring a gradual approach to support the jobs market and economic stability.