US inflation accelerates in September, raising bets on a Fed rate hike

PCE inflation, year on year

3.6 per cent in September

The Fed's preferred PCE inflation measure reached 3.6 per cent in the 12 months to September, up from 3.4 per cent in August.

Gasoline and other goods pushed prices up 0.5 per cent on the month. Excluding food and energy, core inflation rose 3.1 per cent from a year earlier.

"Energy and related prices have moved higher again in recent weeks, and our job is to ensure that relative price changes in some sectors do not broaden out across the economy."

— Fed chair Kevin Warsh

What's next

The Fed held its rate at 3.75 to 4 per cent on Wednesday. Markets price an 84.6 per cent chance of a hike in December, according to CME's FedWatch Tool.