US inflation accelerates in September as energy prices surge

US consumer inflation picked up pace in September, with energy prices climbing sharply and underlying price pressures remaining sticky, according to latest economic data that could influence the Federal Reserve's monetary policy decisions in coming months.

The acceleration in both headline and core consumer price indices reflects ongoing cost-of-living pressures for American households, with fuel prices emerging as a key driver of the monthly increase. Core inflation, which strips out volatile food and energy components, also remained elevated, suggesting that price pressures extend beyond temporary energy market fluctuations.

The stronger-than-expected inflation readings have intensified speculation among economists and financial markets about the likelihood of another rate increase before the end of 2023. The Federal Reserve has paused its aggressive tightening cycle in recent months, but persistent inflation above its two per cent target may compel policymakers to resume rate hikes.

Fed officials have repeatedly indicated they are prepared to act if inflation fails to moderate as expected. The latest data provides fresh evidence of stickier price pressures, potentially shortening the window for policymakers to hold rates steady. Market participants are closely monitoring upcoming economic indicators for signals about the central bank's next move.