US CPI: September Inflation Ticks Up More Than Expected to 2.4%, Stocks Fall, Dollar Rallies

It’s a mixed bag of consumer price data with the annual pace easing to a three-year low but coming above Wall Street estimates.

• The consumer price index USCPI, or simply inflation data, rose by 2.4% in September on an annualized basis. The figure was the lowest the US has seen in the last three years but slightly overshot analysts’ consensus views for a 2.3% rise. The monthly rate also topped expectations, coming in at a 0.2% clip from August, against calls for 0.1%. Core prices stayed elevated at 3.3% from a year ago, surpassing the 3.2% clip expected.
• While September’s CPI report landed above expectations it did slide below the 2.5% pace logged in August. In other words, the inflation trajectory continues to move to the downside, easing concerns of stubborn price pressures. And, what’s more, it keeps the Federal Reserve on track toward the next cut to interest rates. The US central bank meets in November and is expected to slash borrowing costs by another 25 basis points.
• Reactions across the board — markets didn’t jump for joy at the sight of lowering price growth. Instead, mixed feelings swept stocks with an initial modest selloff taking place right after the news was released. Later on, buying momentum picked up and the three main indexes — S&P 500, Dow, and Nasdaq — clawed back the bigger chunk of the intraday losses but remained in the red for the session. The US dollar strengthened with the buck’s index rising above 103, on track for the ninth straight day of wins.