US inflation rises slightly less than expected, adding to expectations for Fed rate cut next week

US inflation rose 0.3% in September, below 0.4% forecast after climbing 0.4% in August, while annualized CPI increased 3.0% vs consensus for 3.1% rise, compared to 2.9% in rise previous month.

Core CPI, which excludes volatile food and energy components, was up 0.2% last month after rising 0.3% in August and slightly missing expectations for 0.3% increase. In twelve months to September, core CPI increased 3.0%, slightly below 3.1% forecast and 3.1% rise in August.

September inflation report, release of which was delayed due to US government shutdown, showed that rise in consumer prices in September was slower than forecasted, adding to wide expectations for Fed rate cut in next week’s monetary policy meeting.

Although economists expected stronger rise in prices, due to import tariffs, businesses have so far managed to avoid immediate negative impact by accumulating inventories before duties were fully implemented.

However, the outlook remains clouded with price expected to pick up into 2026.