US consumer inflation climbed to its highest level in four months, while core CPI rose to 2.6 per cent year-on-year, exceeding market expectations and strengthening the case for a cautious Federal Reserve.
US consumer price inflation rose to 3.7 per cent year-on-year in September, above market expectations of 3.6 per cent, according to the latest inflation figures. The reading marks the highest level in four months, signalling persistent inflationary pressures in the world’s largest economy.
Core consumer price inflation, which excludes volatile food and energy prices, also came in higher than expected. Core CPI rose 2.6 per cent year-on-year in September, compared with market expectations of 2.5 per cent and 2.4 per cent in the previous month.
The higher-than-expected inflation figures could complicate the US Federal Reserve’s monetary policy outlook, potentially strengthening the case for a more hawkish stance on interest rates.
Persistent inflation could limit the Fed’s room to cut interest rates, as policymakers continue to assess price pressures and the broader economic outlook. A more cautious approach to monetary easing could weigh on risk-sensitive assets, including technology stocks.
The Nasdaq, which has significant exposure to technology and growth-orientated companies, could face pressure as investors reassess the outlook for interest rates. Higher rates tend to increase borrowing costs and reduce the relative appeal of future earnings, making growth stocks particularly sensitive to monetary policy expectations.