September CPI: The Real Story Is What Happens After the Oil Shock.
The latest US inflation report caught my attention, but not just because headline CPI came in hotter than expected.
US CPI reached 3.7% year over year in September, up from 3.4% in August. Monthly inflation accelerated from 0.4% to 0.6%.
Here’s the detail I find more interesting: gasoline prices jumped 9.1% in September, accounting for more than half of the monthly increase in headline CPI.
That changes how I look at this report.
This is not simply a story about prices rising everywhere at the same speed. Energy is doing a significant part of the damage, while monthly core CPI increased 0.3% for the second consecutive month.
But there’s another side to this.
Core inflation still climbed to 2.6% annually, and shelter costs rose 0.4% during September. Even if oil prices cool, the broader inflation picture may not improve immediately.
For markets, that creates a difficult question.
If energy prices remain elevated, inflation could stay under pressure for longer. That may complicate the outlook for interest rates and US Treasuries. But one CPI report alone cannot confirm the next move in monetary policy.
My focus now is on whether energy prices begin to cool and whether core inflation follows.
The important signal isn't just how high inflation went. It's whether the pressure starts spreading—or finally fades.
What matters more from here: the next oil move or the next core CPI reading?
#CPI #Inflation #Oil #Treasuries #CPIWatch
The latest US inflation report caught my attention, but not just because headline CPI came in hotter than expected.
US CPI reached 3.7% year over year in September, up from 3.4% in August. Monthly inflation accelerated from 0.4% to 0.6%.
Here’s the detail I find more interesting: gasoline prices jumped 9.1% in September, accounting for more than half of the monthly increase in headline CPI.
That changes how I look at this report.
This is not simply a story about prices rising everywhere at the same speed. Energy is doing a significant part of the damage, while monthly core CPI increased 0.3% for the second consecutive month.
But there’s another side to this.
Core inflation still climbed to 2.6% annually, and shelter costs rose 0.4% during September. Even if oil prices cool, the broader inflation picture may not improve immediately.
For markets, that creates a difficult question.
If energy prices remain elevated, inflation could stay under pressure for longer. That may complicate the outlook for interest rates and US Treasuries. But one CPI report alone cannot confirm the next move in monetary policy.
My focus now is on whether energy prices begin to cool and whether core inflation follows.
The important signal isn't just how high inflation went. It's whether the pressure starts spreading—or finally fades.
What matters more from here: the next oil move or the next core CPI reading?
#CPI #Inflation #Oil #Treasuries #CPIWatch