U.S. CPI rose 3.7% year over year and 0.6% month over month in September, broadly in line with expectations. The real upside surprise was core CPI: up 0.3% month over month and 2.6% year over year, both above expectations and rising for a third straight month—showing inflation is still climbing even after excluding oil prices.
There were three main drivers. Energy rose the most: gasoline prices climbed 9.1% month over month, accounting for more than half of the increase, driven by the U.S.-Iran conflict, Brent crude topping $100, and diesel prices hitting a record high.
Food prices were stable for now, but high diesel costs are starting to feed through; PepsiCo has already raised prices. The toughest issue is the broadening of core price increases: housing, medical care, recreation, transportation, used cars, and IT goods all accelerated month over month, with only communications prices easing.
Markets: The dollar index rose to 102.53, its highest level in 18 months. The 10-year U.S. Treasury yield topped 5.3% intraday before closing at 5.188%. The Nasdaq fell 1.88%, while the Philadelphia Semiconductor Index dropped 4.3% for a sixth consecutive session. Apple rose 0.5% against the trend, becoming the second company to reach a $5 trillion market value.
Gold fell below $4,100, and silver dropped more than 6%. Asia-Pacific markets came under pressure: the Hang Seng Index opened down 0.8%, and the Hang Seng Tech Index fell 2.21%.
Policy: The probability of a rate hike in October jumped from 21.6% to 43.7%, but Fed officials broadly said there was no rush to act—the 10-year yield is already above 5%, and the dollar has broken above 102.
Financial conditions are already tight, and September nonfarm payrolls rose by just 29,000, with the previous reading revised down by 60,000. The mainstream expectation is that rates will remain unchanged in October, followed by a 25-basis-point hike in December.
The key things to watch are Warsh’s speech in Bangkok on Thursday evening (the last window before the blackout period), September PCE data, and oil prices. Bottom line: The data change the pace, not the direction; oil prices remain the deciding factor. #9月CPI来袭原油美债走势如何
There were three main drivers. Energy rose the most: gasoline prices climbed 9.1% month over month, accounting for more than half of the increase, driven by the U.S.-Iran conflict, Brent crude topping $100, and diesel prices hitting a record high.
Food prices were stable for now, but high diesel costs are starting to feed through; PepsiCo has already raised prices. The toughest issue is the broadening of core price increases: housing, medical care, recreation, transportation, used cars, and IT goods all accelerated month over month, with only communications prices easing.
Markets: The dollar index rose to 102.53, its highest level in 18 months. The 10-year U.S. Treasury yield topped 5.3% intraday before closing at 5.188%. The Nasdaq fell 1.88%, while the Philadelphia Semiconductor Index dropped 4.3% for a sixth consecutive session. Apple rose 0.5% against the trend, becoming the second company to reach a $5 trillion market value.
Gold fell below $4,100, and silver dropped more than 6%. Asia-Pacific markets came under pressure: the Hang Seng Index opened down 0.8%, and the Hang Seng Tech Index fell 2.21%.
Policy: The probability of a rate hike in October jumped from 21.6% to 43.7%, but Fed officials broadly said there was no rush to act—the 10-year yield is already above 5%, and the dollar has broken above 102.
Financial conditions are already tight, and September nonfarm payrolls rose by just 29,000, with the previous reading revised down by 60,000. The mainstream expectation is that rates will remain unchanged in October, followed by a 25-basis-point hike in December.
The key things to watch are Warsh’s speech in Bangkok on Thursday evening (the last window before the blackout period), September PCE data, and oil prices. Bottom line: The data change the pace, not the direction; oil prices remain the deciding factor. #9月CPI来袭原油美债走势如何