U.S. INFLATION IS HOTTER THAN HEADLINE FIGURES SUGGEST September U.S. CPI exceeded forecasts in headline and core CPI. Rounded figures looked close to expectations, but unrounded data showed stronger pressure. The dollar rose as rate-hike bets increased. UNROUNDED FIGURES CHANGE THE PICTURE Headline CPI rose 0.649% monthly versus 0.58% expected. Rounded to 0.6%, it looked close to forecast, but the actual figure was notably higher. Core CPI rose 0.335% monthly versus 0.21% expected, beating forecasts for a second straight month. August core CPI was also 0.3% versus 0.2% expected. ANNUAL INFLATION ROSE TO 3.7% Headline CPI increased from 3.4% to 3.738% year over year. Core inflation ended a three-month decline, rising from 2.446% to 2.564%. ENERGY DRIVES HEADLINE CPI U.S. gasoline reached 4.41 $ per gallon in early October, a record for the month and about 40% higher year over year. Core CPI’s upside surprise suggests price pressure is spreading into services. A RARE UPSIDE SURPRISE Across 23 CPI reports since October 2024, monthly core inflation beat expectations four times and missed 11 times. September marked the fifth beat, with two consecutive upside surprises. DOLLAR RISES, RATE-HIKE BETS GROW Bloomberg’s Dollar Spot Index hit its highest since November. Markets priced a 17%–20% chance of an Oct. 27–28 hike and about an 85% chance of at least one hike by December. The Fed rate remains 3.75%–4.00%. University of Michigan inflation expectations rose to 4.7% over one year and 3.5% over five years, potentially encouraging a firmer Fed stance. MARKET OUTLOOK Hotter CPI revives the possibility of an October hike. A stronger dollar and higher rate expectations could pressure crypto and equities. Gold faces a balance between inflation-hedge demand and rising real yields. Markets await the Fed Beige Book at 21:00 Türkiye time, Thursday’s PPI and retail sales, and the Oct. 28 Fed decision. The key question is whether core inflation momentum persists. $BTC