Investing.com - U.S. consumer prices rose less than expected in September, but still pointed to a steady increase in inflation, keeping pressure on the Federal Reserve to stick to its plan for gradual interest rate hikes.
The Labor Department said on Thursday its consumer price index (CPI) rose 0.1% last month, compared to expectations for a gain of 0.2%.
In the 12 months through September, inflation rose 2.3%, below forecasts for a reading of 2.4% and down from 2.7% in August.
Core CPI, a key gauge of underlying consumer price pressures that excludes food and energy costs, increased by 0.1% from a month earlier, below forecasts for a gain of 0.2%. The annual increase in the core CPI was 2.2%. Economists had forecast an increase of 2.3%.
Core prices are viewed by the Federal Reserve as a better gauge of longer-term inflationary pressure precisely because they exclude the volatile food and energy categories. The central bank usually tries to aim for 2% core inflation or less.
Recent solid U.S. economic reports and an upbeat assessment of the economy from Fed Chairman Jerome Powell have triggered expectations for a faster-than-expected pace of rate hikes from the Fed.
The Fed is widely expected to raise interest rates for what would be the fourth time this year at its December meeting and has planned three further rate hikes in 2019.
U.S. Treasury yields started to climb last week amid expectations for higher interest rates. The rise in Treasury yields, along with fears over slowing global growth and trade tensions, sparked a selloff that led to Wall Street’s worst daily loss in eight months on Wednesday.
The sharp falls on Wall Street prompted U.S. President Donald Trump to renew his recent criticism of the Fed, calling it “crazy” for its plans to continue hiking rates.
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