U.S. CPI rose again in September: headline inflation jumped to 3.7%, while core inflation climbed from 2.4% to 2.6%. Both came in above expectations. It was the first increase since May. The main driver was the war with Iran, which pushed oil prices higher—diesel even hit a record high. After prices surged at the pump, inflationary pressure began spreading to other areas, so it’s not just drivers feeling the pinch.
As soon as the data came out, Treasury yields jumped, the dollar strengthened, and gold and silver were hit hard. Markets had previously been debating whether there would be a rate hike in September; now they’re pricing in three more hikes by the end of 2027. The prospect of high interest rates is stretching further into the future.
The midterm elections are fast approaching, and high oil prices and living costs are leaving voters unhappy—a mood that could easily turn against the Republicans. Trump has been trying to push oil prices down, but the fallout from the war continues.
August’s CPI and PPI had already raised rate-hike expectations. September’s data has dealt another blow, and high rates are gradually shifting from a “short-term shock caused by the war” to something people increasingly expect to last longer. For crypto, a longer period of elevated rate expectations and a stronger dollar make the liquidity outlook even murkier.
As soon as the data came out, Treasury yields jumped, the dollar strengthened, and gold and silver were hit hard. Markets had previously been debating whether there would be a rate hike in September; now they’re pricing in three more hikes by the end of 2027. The prospect of high interest rates is stretching further into the future.
The midterm elections are fast approaching, and high oil prices and living costs are leaving voters unhappy—a mood that could easily turn against the Republicans. Trump has been trying to push oil prices down, but the fallout from the war continues.
August’s CPI and PPI had already raised rate-hike expectations. September’s data has dealt another blow, and high rates are gradually shifting from a “short-term shock caused by the war” to something people increasingly expect to last longer. For crypto, a longer period of elevated rate expectations and a stronger dollar make the liquidity outlook even murkier.