US inflation is rising more strongly than expected, increasing uncertainty in global financial markets. The pressure on prices has diminished expectations for interest rate cuts by the Federal Reserve, while the possibility of further rate hikes has pushed the dollar to its highest level in 18 months. Concerns are growing that inflation may persist and that rate cuts could be delayed, especially amid instability in oil supply from the Middle East.
According to the International Financial Center, the Consumer Price Index (CPI) for September rose 3.7% compared to the same month last year and increased by 0.6% from the previous month. The core CPI, excluding food and energy, also exceeded expectations, rising 2.6% year-over-year.
Breaking it down by category, energy prices surged 20.4% compared to the same month last year, while housing and clothing prices rose by 3.2% and 3.4%, respectively. The inflationary pressures are evident not only in energy but also in other sectors, raising concerns that the upward trend in prices may not ease.
With inflation data coming in stronger than anticipated, attention is turning to the Fed's monetary policy. The prevailing expectation in the market is for the interest rate to remain unchanged in October. According to the CME FedWatch tool cited by the International Financial Center, the probability of a rate freeze stands at 67.3%. However, the center warns that this inflation data could heighten expectations for additional rate hikes in the coming months.
Tensions in the Middle East are also influencing inflation and interest rate forecasts. In October, over 20 vessels have been attacked in the Strait of Hormuz, and a Singaporean oil tanker sank due to an Iranian attack. If oil transport in this critical shipping lane is disrupted, international oil prices could rise further, increasing inflationary pressures and delaying potential rate cuts by the US.
The International Energy Agency (IEA) has warned that a global diesel shortage could persist until mid-next year, with the possibility of diesel prices rising again in the coming weeks. Continued increases in energy prices could delay price stabilization and pose challenges for the Fed's interest rate decisions.
In financial markets, US stocks have declined, and investor anxiety has increased. On October 14, the dollar index rose by 0.35% to 102.54, marking its highest level in 18 months. Brent crude oil prices increased by 0.35% to $106.06 per barrel. In contrast, the S&P 500 index fell by 1.11%, and the volatility index (VIX), which reflects market anxiety, rose by 10.48% to 16.87.
The International Financial Center has diagnosed that the risks to the global economy, including high oil prices and significant fiscal debts in major countries, may persist. It suggests that ongoing inflationary pressures and energy supply uncertainties could impact the Fed's monetary policy direction and the volatility of international financial markets.
* This article has been translated by AI.
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