U.S. September CPI increase slightly missed expectations, making the prospect of the Federal Reserve's interest rate cut next week clearer

The U.S. September CPI increase was slightly lower than expected, paving the way for the Federal Reserve to cut interest rates again next week. The U.S. Department of Labor reported on Friday that after a 0.4% increase in August, the September CPI rose 0.3% month-on-month; the annual rate recorded 3.0%, slightly widening from August's 2.9% increase. Excluding the volatile food and energy components, the core CPI rose 0.2% month-on-month, with the year-on-year increase dropping from 3.1% in August to 3.0%. Despite the government shutdown causing a halt in the release of economic data, the CPI report was still published to assist the Social Security Administration in calculating the cost-of-living adjustments for millions of retirees and other beneficiaries in 2026, which was originally scheduled for release on October 15. As companies digest the inventory accumulated before the extensive tariffs imposed by Trump and bear some of the tax burden themselves, the transmission effect of import tariffs has been relatively gradual. Economists point out that companies are achieving this at the expense of hiring and estimate that consumers have so far borne about 20% of the tariff costs