US inflation rises before midterm elections, fuelling rate hike fears

What the report says

US consumer prices rose faster in September, the last inflation reading before the midterm elections, adding to expectations that the Federal Reserve could lift interest rates again later this month, Al Jazeera reported. The Labor Department’s Bureau of Labor Statistics said annual inflation reached 3.7 percent, up from 3.4 percent in August, while monthly prices increased 0.6 percent.

According to the report, gasoline was the biggest driver of the increase. Petrol prices climbed 9.1 percent in September and were up 34.2 percent from a year earlier, while shelter costs also advanced. Food prices were broadly stable overall, with increases in some grocery categories offset by declines in others. The article also noted a sharp rise in prices for computer software and accessories, which it linked to heavy investment in artificial intelligence infrastructure.

The inflation figures come just days before the Fed’s next policy decision, and economists remain split over whether officials will raise rates again or pause. Market pricing cited by Al Jazeera showed nearly even odds between holding rates steady and a quarter-point increase. The report said the data is likely to intensify political pressure ahead of the November 3 midterms, while Wall Street indexes fell after the release.