US inflation data released

Consumer prices in the US recorded a 0.4 percent increase in September compared to the previous month. The annual increase came in at 3.7 percent.

Economists participating in the Bloomberg survey had expected monthly inflation in September to be 0.3 percent. The expectation for annual inflation was set at 3.6 percent.

Core indicators were notable for coming in line with expectations. In September, consumer prices excluding energy and food increased by 0.3 percent compared to the previous month and by 4.1 percent compared to the same period of the previous year.

In the survey, the expectation for monthly core inflation was 0.3 percent, and the expectation for annual core inflation was 4.1 percent.

The latest inflation data underscores how a strong labor market supports consumer demand, which increases the risk of inflation remaining above the Fed's 2 percent target. It is unclear whether this will lead the Fed to another interest rate hike this year, especially in an environment where many policymakers view the rise in bond yields as a tightening factor that could substitute for a rate hike. Nevertheless, the released data justifies the desire of Fed members to keep interest rates at high levels.

Statements from numerous Fed officials this week suggest that the central bank may keep interest rates steady at its November 1 meeting, with many members holding the view that further rate hikes may not be necessary.

Data on producer prices released on Wednesday had pointed to inflation exceeding expectations due to the impact of energy items.

The US producer price index rose by 0.5 percent in September compared to the previous month, while gasoline prices increased by 5.4 percent in the same period. The PPI excluding food and energy recorded a 0.3 percent rise. The annual increase rate in the PPI was 2.2 percent.