Inflation continues to weigh on American households, with energy costs driving the Consumer Price Index (CPI) upward—at a time when purchasing power has emerged as a central issue in the midterm legislative election campaign.
Inflation in the United States remained on an upward trajectory in September, reaching 3.7% year-over-year, driven—unsurprisingly—by energy prices, according to official data released this Wednesday.
On a monthly basis, the Consumer Price Index (CPI) followed the same trend, rising by 0.6%—up from 0.4% the previous month—though this was in line with analyst expectations, according to the consensus figures published by MarketWatch.
In August, the year-over-year inflation rate stood at 3.4%. Analysts had anticipated a higher CPI, though one closer to 3.6% year-over-year.
As a direct consequence of these figures, which disappointed the market, yields on U.S. government debt surged on Wednesday; the 10-year Treasury note—a key market benchmark—reached 5.32%, up from 5.21% at the close of trading on Tuesday.
Lenders are naturally demanding higher interest to compensate for inflation, which erodes their margins. Nevertheless, this increase should not necessarily prompt the Federal Reserve (Fed) to accelerate its timeline for potential rate hikes, following the interest rate increases implemented at its most recent meeting.
