U.S. September inflation rebounds! Core CPI year-over-year rise hits a new high since June, expectations of a Fed rate hike heat up.

Title context: U.S. September inflation rebounds! Core CPI year-over-year rise hits a new high since June, expectations of a Fed rate hike heat up. Text: Data released by the U.S. Department of Labor on Tuesday showed that the U.S. September CPI year-over-year rate rose to 3.7%, a new high since May of this year and above the market expectation of 3.6%; the CPI month-over-month rate rose to 0.6%, a new high since April of this year and in line with expectations. Soaring energy prices were a key driver of U.S. inflation U.S. energy inflation in September rose 20.4% year-over-year, higher than 16.3% last month. At the same time, U.S. core CPI in September, which excludes volatile items such as energy and food, rose 2.6% year-over-year, a new high since June of this year and above the market expectation of 2.5%; core CPI rose 0.3% month-over-month, above the market expectation of 0.2%. This latest inflation data marks the first rebound in the U.S. inflation rate since May, highlighting that the energy price shock triggered by the Middle East war is still affecting the world's largest economy. After the war broke out, gasoline and diesel prices surged at one point. Although they fell back in the summer, fuel prices rose again in recent months as tensions escalated, pushing diesel prices to a record high. U.S. President Trump has been trying to control the impact of rising energy prices. Polls show that voters dissatisfied with the status quo may turn their discontent toward Republicans in next month's midterm elections, which will determine control of Congress. The rebound in U.S. inflation has led the market to increase bets on a Federal Reserve rate hike in October, while also increasing bets on three more Fed rate hikes by the end of 2027. The U.S. two-year Treasury yield, which is sensitive to Federal Reserve monetary policy, rose 10 basis points to 4.89%; the U.S. 10-year Treasury yield rose 10 basis points to 5.318%. The U.S. Dollar Index (DXY) also moved higher. International gold and silver prices fell, and U.S. stock index futures for the three major indexes turned lower. Some analysts said that a core CPI reading above expectations will reinforce expectations of further Federal Reserve rate hikes. The latest communication from Federal Reserve policymakers indicates that they have not laid the groundwork for consecutive rate hikes in October. Today's stronger-than-expected core CPI increase may not be enough to change that. But it will reinforce expectations of further Fed tightening, and the September rate hike is almost certainly not a "one-off action."