US Inflation Cools to 2.4% in September, Strengthening Case for Fed Rate Cut
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US consumer inflation eased more than expected in September, with the Consumer Price Index rising 2.4% from a year earlier, according to the latest government data. That marked the slowest annual increase since February 2021 and came in below economists’ forecast of 2.6%, suggesting price pressures continue to moderate.
On a monthly basis, the report pointed to a softer inflation backdrop as higher borrowing costs and easing supply conditions help restrain demand. Core CPI, which strips out volatile food and energy prices, rose 3.3% year over year, also below expectations and consistent with a gradual cooling in underlying inflation.
The data reinforced market expectations that the Federal Reserve could move to cut interest rates at its November meeting. Investors viewed the report as supportive of a more accommodative policy stance, with US stock futures rising after the release.
While inflation remains above the Fed’s 2% target, the latest reading adds to signs that the central bank’s aggressive tightening cycle has helped bring price growth down without triggering a sharp economic slowdown. Policymakers are likely to weigh the improving inflation trend against broader labor market and growth conditions as they decide the timing of any rate move.
