Hot inflation data reignites Federal Reserve rate hike speculation. U.S. inflation accelerated more than expected in September, potentially bringing multiple Federal Reserve rate increases back into focus.

The September Consumer Price Index climbed 0.6%, up from 0.4% in August and matching economist projections for 0.6%. Year-over-year, CPI rose 3.7% compared to 3.4% in August, exceeding the 3.6% forecast.

Core CPI, which excludes food and energy costs, also increased 0.3% in September, holding steady from August but surpassing the 0.2% consensus. On a yearly basis, core CPI rose 2.6%, up from 2.4% previously and above the 2.5% estimate.

Financial markets reacted sharply. The bond sector came under pressure, with the 10-year U.S.

Treasury yield climbing 9.3 basis points to 5.308% and the 2-year yield surging 13.1 basis points to 4.924%. Nasdaq 100 futures declined 0.65% and S&P 500 futures dropped 0.3%.

Gold fell 1.5% to $4,116 per ounce. Earlier, several Federal Reserve officials had signaled a possible 25-basis-point rate increase before year-end, with markets anticipating a pause at the upcoming meeting later this month but a hike at the final 2024 session in early December.

Wednesday’s figures may now bring an October rate hike back into play.