U.S. inflation rises across the board, and the market increases expectations for the Federal Reserve to raise interest rates

Driven by the impact of the Iran war, U.S. CPI for September, not seasonally adjusted, rose to 3.7%, further increasing the cost of living pressure on Americans as the midterm elections in November approach. The not seasonally adjusted core CPI year-on-year rate increased from 2.4% in August to 2.6%.

After the data was released, U.S. Treasury yields surged, international gold and silver prices plummeted, and the U.S. dollar index rose, while the market increased bets on three more interest rate hikes by the Federal Reserve before the end of 2027. The data released by the U.S. Bureau of Labor Statistics marks the first increase in U.S. inflation rates since May, highlighting that the energy price shocks triggered by the Middle East war continue to affect the world's largest economy.

After the outbreak of the war, gasoline and diesel prices soared, then retreated during the summer, but in recent months, as tensions escalated, fuel prices rose again, pushing diesel prices to a historic high. U.S. President Trump has been trying to control the impact of rising energy prices.

Polls show that dissatisfied voters may direct their discontent toward the Republican Party in next month's midterm elections, which will determine control of Congress.