The US September CPI rose by 3.7% year-on-year, exceeding expectations.

The New York Times analysis pointed out that the last inflation report before the U.S. midterm elections showed the U.S. September CPI rose by 3.7% year-on-year, higher than the expected 3.6%, and increased by 0.6% month-on-month, meeting expectations. The core CPI, excluding the more volatile food and energy prices, rose 0.3% month-on-month and 2.6% year-on-year. The ongoing war in Iran has continued to push up fuel costs, with energy prices rising 5.2% in September and increasing 20.4% since the beginning of the year. Gasoline prices alone increased 9.1% in September and surged 34.2% over the past year. The increase in fuel costs pushed up air ticket prices, which rose 1.2% in September and have increased 22.4% so far this year. Politically, this is bad news for President Trump, who just last night tried to prove at a rally in Alaska that prices were improving under his leadership. The bond market reacted strongly, with U.S. Treasury yields rising—especially the yields on short-term bonds, which are more sensitive to changes in interest rate expectations.