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September CPI comes in hotter than expected: headline 3.7% y/y, core 2.6%; Fed hike odds jump to 39%
What happened
The September Consumer Price Index, released at 8:30 AM ET Wednesday, came in hotter than economists expected. Headline CPI rose 3.7% year-over-year, up from 3.4% in August and above the 3.6% consensus; core CPI (excluding food and energy) rose 2.6%, up from 2.4% and above the 2.5% consensus. Stock futures turned lower after the data — Nasdaq 100 futures down 0.5%, S&P 500 down 0.2%, Dow down 0.1% — and the 10-year Treasury yield jumped to 5.26% from 5.19% before the reading. Per CME FedWatch, traders raised the probability of a Fed rate hike at the meeting in two weeks to 39%, up from 22% before the print.
Why it matters & what’s next are part of Pro, along with the audio summary.
Start your free 14-day trialWho’s affected
- Broad market (S&P 500, Nasdaq, Dow futures fell after the print); rate-sensitive growth/tech
- Treasury market (10-year yield jumped to 5.26%); banks and financials (higher-for-longer tailwind for net interest margins but headwind for credit and deal activity).
Sources