Inflation heats up as gasoline prices surge in September

Hotter inflation in September pushed gasoline costs up sharply, raising expectations for additional Federal Reserve action. After the CPI rose 0.6% in September following a 0.4% increase in August, markets lifted the probability of a rate hike at the Oct. 27-28 meeting to about 52%, up from roughly 22%, according to CME’s FedWatch tool. Gasoline jumped 9.1% and drove more than half of the monthly CPI gain. Core CPI excluding food and energy rose 0.3% in September. Year over year, CPI accelerated to 3.7%. Core inflation climbed to 2.6%. Shelter and airline fares also rose.