US inflation rises to 3% in September — paving way for fed to cut rates next week

US Inflation Ticks Up to 3% in September, Paving the Way for Federal Reserve Rate Cuts

US inflation edged up in September to 3%, a slightly lower-than-expected figure that clears the path for the Federal Reserve to cut interest rates at its policy meeting next week.

According to the Bureau of Labor Statistics, the Consumer Price Index (CPI) increased by 3% over the past 12 months ending September. This marks the fastest inflation rate since the start of the year and a small rise from August’s 2.9%. Despite this increase, economists polled by Bloomberg had anticipated a slightly higher year-over-year inflation rate of 3.1%.

On a monthly basis, the CPI rose by 0.3%. Core inflation, which excludes the more volatile food and energy prices, also grew by 3% over the last 12 months. This was a slight decline from the previous month’s 3.1%, while economists expected it to remain steady at 3.1%.

The release of September’s CPI report was delayed by more than a week due to the ongoing federal government shutdown, now the second-longest in US history at 23 days with no clear end in sight. The report, originally scheduled for October 15, finally provided insight into inflation trends amid significant economic uncertainty.

“Inflation coming in weaker-than-expected further solidifies a continuation of the Federal Reserve’s rate cutting cycle, at least for the next two meetings,” said Skyler Weinand, Chief Investment Officer at Regan Capital. He added, “Once the government reopens and if we start to see weak unemployment data and the unemployment rate rises precipitously towards 5%, we could expect either a 50 basis point cut for December or the Fed to communicate a string of cuts in 2026.”

Wall Street welcomed the data with cautious optimism. The Dow Jones Industrial Average rose by 66 points, or 0.1%, in premarket trading. However, concerns remain about the accuracy of the consumer inflation report, given the disruption caused by the government shutdown.

The Federal Reserve is widely expected to cut interest rates at its policy meeting next Wednesday, following its first quarter-point reduction since December, which was implemented last month. However, there remains some disagreement among Fed officials on the pace of easing. For instance, Fed Governor Stephen Muir, recently appointed by President Trump, has advocated for a half-point cut, while others, including Christopher Waller, favor a more gradual quarter-point reduction.

Economists are also monitoring any indications that President Trump’s tariffs are beginning to impact consumer prices. As inflation and economic signals evolve, all eyes will remain on the Fed’s upcoming decision and the broader effects of ongoing fiscal policies.
https://nypost.com/2025/10/24/business/us-inflation-rises-to-3-in-september-paving-way-for-fed-to-cut-rates-next-week/