US CPI Jumps to 3.7% in September, Lifting October Fed Rate Hike Odds to 45%

The US Consumer Price Index (CPI) rose to 3.7% in September, according to figures reported by COINOTAG, lifting the market-implied probability of a Federal Reserve interest rate hike at its next policy meeting to roughly 45%. The odds, derived from CME FedWatch data, reference the Federal Open Market Committee (FOMC) meeting scheduled for October 28. As the most closely watched gauge of US inflation, the monthly CPI release is a fixed point on the economic calendar that feeds directly into expectations for the central bank's next move.

Update (15:57 UTC): A later CME FedWatch snapshot lifted the hike odds higher still: 53.7% for a 25-basis-point move at the October 28 meeting, against 22.1% a day earlier, with a second hike in December priced at 50%. The swing from the prior day's reading shows how sharply market-implied policy expectations can shift around a single inflation print.

What the Data Show

The 3.7% figure cited in the report reflects the pace of US consumer inflation as measured by the CPI. The index, compiled and published monthly by the US Bureau of Labor Statistics (BLS), tracks the average change over time in prices paid by urban consumers for a basket of goods and services, including food, energy, shelter, and transportation. Because that basket spans the essentials households pay for month to month, the headline number serves as the most widely cited shorthand for US inflation.

Fed Policy Context

The Federal Reserve has an official longer-run inflation target of 2%, meaning a 3.7% CPI reading sits well above the central bank's stated goal. The FOMC, the Fed's rate-setting body, adjusts the federal funds rate — the overnight lending rate that anchors borrowing costs across the US economy — and has historically moved in 25-basis-point increments when tightening policy. Moves in that rate filter through to the interest rates consumers and businesses encounter on everything from mortgages and auto loans to credit card balances.

CME FedWatch, the tool behind the odds cited in the report, derives implied probabilities of future rate decisions from the pricing of 30-Day Federal Funds futures. Rising probabilities indicate that futures markets assign a greater likelihood to a hike at the October 28 meeting, with traders placing the odds of an additional move in December at 50%. The FOMC holds eight scheduled meetings a year, each concluding with a rate decision, which makes the October 28 gathering the next fixed checkpoint for the expectations now embedded in futures pricing.

This content was first published by COINOTAG on October 14, 2026: https://en.coinotag.com/us-september-cpi-3-7-percent-october-fed-hike-odds