Both measures came in slightly below economists’ expectations, providing some reassurance to markets that inflation is not accelerating out of control.
“Inflation edged higher in September, just as the Federal Reserve prepares to lower interest rates again next week in an effort to support a cooling labor market,” said First American senior economist Sam Williamson.
“Despite the uptick, the Fed is still expected to prioritize addressing growing signs of labor market softness over further progress against inflation and cut rates at its meeting next week. However, officials remain divided on how aggressively to ease, making a December cut far from certain and dependent on incoming data,” Williamson said.
Mortgage markets responded swiftly to the CPI release, with the 10-year Treasury yield slipping below 4%.
“Today’s CPI release brings a bit of relief for home buyers. The average 30-year, fixed rate now sits around 6.2%—the lowest since last September. A drop below 6.1% would mark the most affordable level since September 2022, when rates were surging,” Williamson said.