Trump Faces Bad Inflation News Ahead of Election as US September CPI YoY Tops Expectations

On Oct. 14, The New York Times noted the final inflation report ahead of the U.S. midterm elections showed U.S. CPI rose 3.7% year-over-year in September, above the 3.6% forecast, with a 0.6% month-over-month increase, in line with expectations. Core CPI, excluding volatile food and energy prices, rose 0.3% month-over-month and 2.6% year-over-year. The ongoing war in Iran continues to drive up fuel costs, with energy prices surging 5.2% in September and 20.4% year-to-date.

Gasoline prices alone jumped 9.1% in September, marking a cumulative increase of 34.2% over the past year. Soaring fuel costs drove up airfares, which climbed 1.2% in September and 22.4% year-to-date. From a political standpoint, this is unfavorable news for President Trump, who just last night at a rally in Alaska was attempting to argue that prices were improving under his leadership. The bond market reacted sharply, with U.S. Treasury yields rising, particularly for short-term bonds that are more sensitive to shifts in interest rate expectations. (Jinshi)