US Inflation Hits 3.7% in September, Boosting Case for Fed Rate Hike

US inflation accelerated to 3.7% annually in September, exceeding forecasts, with core prices also rising more than expected, signaling inflation may be broadening beyond energy and likely strengthening the case for another Federal Reserve rate hike. The monthly consumer price index rose 0.6%, matching expectations, while core inflation gained 0.3% versus a predicted 0.2%. Traders had priced a 21% chance of an October hike and 88% for December before the release, with odds now expected to increase. The data comes as the 10-year Treasury yield fell to 5.20% from 5.36% last week, with most investors saying they'd only abandon stocks for bonds at 6% or higher. Meanwhile, bank earnings disappointed, with Citigroup dropping 5.5%, while oil stocks rallied on Middle East tensions.