Franklin Templeton: October Fed Rate Hike Unlikely Despite Hot Inflation

US inflation rose 3.7% year-over-year in September, exceeding forecasts and accelerating from August's 3.4%, while core inflation hit 2.6%, keeping pressure on the Federal Reserve but not prompting an expected October rate hike. The Bureau of Labor Statistics reported core inflation excluding energy and food rose from 2.4% to 2.6%, above the 2.5% consensus. Commerzbank said the strong economy and energy prices should push the Fed to continue raising rates, while CPRAM's Bastien Drut noted core inflation shows no real sign of declining. Franklin Templeton's Jeff Schulze argued recent dovish comments from Fed officials suggest the September figures are insufficient for consecutive hikes at the October FOMC meeting. He added that rising long-term yields have tightened financial conditions, with the bond market effectively doing part of the Fed's work.