U.S. Inflation Hits 3.7%, Triggering Stock Sell-Off and Rate-Hike Fears

US inflation rose more than expected in September, triggering a stock market sell-off and raising concerns that the Federal Reserve could increase interest rates again, Danielle Chemtob reported for Forbes Daily.

US inflation accelerated to 3.7% in September as rising energy costs intensified pressure on household budgets and financial markets.

The Consumer Price Index (CPI) increased 3.7% year over year, up from 3.4% in August. Rising energy costs, partly linked to the ongoing war involving Iran, contributed to the increase.

Gasoline prices climbed more than 9% during September, according to the report.

The inflation figures intensified concerns about the outlook for interest rates and weighed on equities.

The recent market downturn also reduced the wealth of some of the world's richest individuals, including Elon Musk, Larry Ellison and Mark Zuckerberg, whose fortunes are closely tied to financial market valuations.

Affordability remains a major issue for voters ahead of the US midterm elections.

Heather Long, chief economist at Navy Federal Credit Union, wrote on X that inflation had nearly erased wage gains since January 2025.

The latest data adds to pressure on policymakers as households continue to contend with higher living costs.

For the Federal Reserve, persistent inflation complicates decisions about whether to maintain current interest rates or tighten monetary policy further.

A rate increase is not guaranteed, however. The central bank's next move will depend on incoming inflation and employment data, as well as its assessment of broader economic conditions.