September Inflation Hits 3.7%, Fed Rate Hike Odds Rise

Inflation rose to 3.7% in September, up from 3.4%, exceeding economist forecasts and driven by higher gas prices, according to new Bureau of Labor Statistics data released Wednesday. Gas prices jumped 9.1% last month, accounting for over half of the monthly increase. Core inflation, excluding food and energy, also ran hot at 2.6% annually, with shelter costs rising at their fastest monthly rate in five months. The report complicates the Federal Reserve's path to its 2% target, boosting odds of an October rate hike to 49%. Stock futures fell, while the 10-year Treasury yield jumped to 5.3%, as inflation has outpaced wage growth for six straight months.