US inflation accelerates to 3.6% on rising fuel prices less than a week before midterms dominated by cost of living

The Commerce Department's PCE index — the Federal Reserve's preferred inflation gauge — rose 0.5% month-on-month in September, the sharpest monthly jump since May, driven by a 9.2% surge in gas and energy prices. Oil has stayed above $100 a barrel since the Iran war triggered shipping restrictions in the Strait of Hormuz. The data lands six days before midterm elections in which cost-of-living anger has become the dominant voter concern.

Trump promised sub-$2 petrol in his 2024 campaign; the national average now stands at $4.25 a gallon.

Core inflation, stripping out fuel and food, also crept up — rising 3.1% annually in September, above August's 3% — signalling price pressure is broadening beyond energy.

The Fed held rates at 3.75%-4% on Wednesday, with Chair Kevin Warsh saying December will 'provide more clarity' on what comes next.