Consumer prices rose at 3.7% annual rate in September as gas costs skyrocket

• September annual CPI rate was 3.7%, with month-over-month headline CPI at +0.6% (meeting estimates).
• Core CPI (ex-food and energy) year-over-year rose to 2.6%, indicating underlying inflationary pressures.
• Energy prices were up 5.2% month-over-month, driven by a 9.1% surge in gasoline costs.
• Treasury yields jumped, with the 10-year rising from 5.18% to 5.25% and the 2-year up 11 basis points from 4.77%.
• The market's probability of a December Fed rate hike increased significantly from 21% to 39%.

The September Consumer Price Index (CPI) showed consumer prices rose at a 3.7% annual rate, with month-over-month headline CPI meeting expectations at +0.6%. Core CPI year-over-year increased to 2.6%. The report highlighted significant increases in gas costs, leading to a jump in Treasury yields and increased probability of a December Fed rate hike.