[Big Insight-Mer] CPI for September was announced. Let's take a look at the results

Since the CPI announcement was different from expectations, I will quickly summarize the situation.

• 1. At 9:30 pm on October 14, 2026, Korean time, the US consumer price index (CPI) for September was announced.

• 2. To conclude first, the CPI came out as high as expected, but it surprised the market by being higher than expected.

• 3. The headline CPI is as high as expected.

4. The headline CPI rose 0.6% from August and 3.7% from the previous year.

5. The reason the headline CPI jumped 0.6% is because of oil prices.

6. Energy prices in September rose 5.2% per month, with gasoline rising 9.1% and heating fuel oil rising 15.3%.

7. Just looking at the situation in the Middle East and gas prices at gas stations, it was obvious that the headline CPI would be high, so the market was not surprised by this.

8. The market was surprised by the core CPI excluding food and energy prices.

9. Core CPI was expected to rise by 0.2% from the previous month and 2.4% from the previous year, but it came out to be 0.3% from the previous month and 2.6% from the previous year.

10. The headline CPI is similar to the body temperature that rises when you catch a cold.

11. As long as the temperature rises due to a cold, it is not too high, you can survive it by taking fever reducers.

12. Core CPI is a mild fever of unknown cause.

13. A persistent low-grade fever with unknown cause is a sign that inflammation is spreading somewhere in the body.

14. The market scenario before the announcement was, "The headline will be high, but the core will be down about 0.2%, which is lower than the 0.3% in August."

15. If the core is 0.2%, there is logic for the Federal Reserve to freeze interest rates in October.

16. As the core rose 0.3% differently from market expectations, suspicion arose that "the oil price shock may have begun to spread to other prices."

17. There is a possibility that the FOMC will raise interest rates in October, not December.

18. U.S. Treasury interest rates reacted first to this announcement.

19. The 10-year U.S. Treasury bond, which seemed to be stabilizing at 5.19%, suddenly jumped to 5.317%.

20. Not only did long-term interest rates rise, but short-term interest rates such as 2-year notes also jumped significantly.

21. The rise in short-term interest rates is due to expectations that the Federal Reserve will raise interest rates once again, and the rise in long-term interest rates is due to concerns about inflation.

22. The basic market scenario of taking a break in October and raising the interest rate once in December to stop at 4.00-4.25% is shaking.

23. Not only US Treasury bonds but also plasters are shaken.

24. Before the announcement, S&P futures were rising, but after the announcement, the direction reversed.

25. S&P, NASDAQ, and Philadelphia Semiconductor Index are starting the market with a decline.

26. This time, let's take a look at the details.

27. Looking at the details, it turns out that raising the core by 0.3% was the result of both rent and product prices rising.

28. Rent (housing costs) rose 0.4%, higher than 0.3% in August, and own housing costs also rose from 0.2% the previous month to 0.3%.

29. Housing costs account for the largest portion of the core CPI, and if it moves, the entire core will be affected.

30. In addition to housing costs, goods are also rising, such as used cars rising from 0.4% to 0.7% and clothing rising from 0.0% to 0.3%.

31. On the other hand, airfares, which are affected by oil prices, are showing a decrease in the increase from 2.7% in the previous month to 1.2%.

32. Looking at the details, it turns out that "rather than the fire from oil prices spreading to the core, rent and property prices have fluctuated."

33. The situation becomes more worrying.

34. Oil prices may come down when the situation in the Middle East is resolved, but rent is a sticky price that tends to go down once it goes up.

35. It is also meaningful that real weekly wages recorded -0.5%.

36. Salary is not keeping up with the rise in prices, so a signal has been turned on due to a slowdown in consumption.

37. The US Producer Price Index (PPI) coming out tomorrow is likely to receive attention.

38. This is because it shows whether price pressure is building up even at the supply stage.

39. Meanwhile, reports are coming out from the Iranian Revolutionary Guard that a container ship passing through the Strait of Hormuz sank due to a mine explosion.

One-line comment.

#### With this CPI announcement, the "off in October" part of the basic scenario of taking a break in October and raising interest rates once in December is shaken. The probability of an interest rate increase in October, which was 22% before the announcement, is now 54% after the announcement. Core CPI of 0.3% is a number that makes the Federal Reserve's head hurt. I thought it was a fever from a cold, but it turned out to be a mild fever. If the cause of the mild fever is inflammation, you should go to the hospital.

Source: Mer's blog – Organizing the world from a different perspective.

https://blog.naver.com/ranto28

This article was rewritten from Mer's blog post with the author's consent. All content may contain errors and is not a recommendation to buy or sell, so it cannot be used as a basis for buying or selling. The content of this post cannot be used as legal basis under any circumstances.