Consumer prices up in September on gasoline

Reuters

Consumer prices rose in September as the cost of gasoline surged, posing a threat to consumers' spending power although faster inflation looked unlikely to derail the Federal Reserve's ultra-easy policy path.

KEY POINTS: The Consumer Price Index increased 0.6 percent last month, in line with analysts' expectations and matching August's reading, data from the Labor Department showed on Tuesday.

Continue Reading Below

Gasoline prices jumped 7 percent in September after climbing 9 percent the prior month. Higher costs at the pump force many American consumers to cut back on other spending.

COMMENTS:

PETER JANKOVSKIS, CO-CHIEF INVESTMENT OFFICER AT OAKBROOK INVESTMENTS LLC IN LISLE, ILLINOIS:

"Basically, people will be reassured the Fed can continue with QE3 for the foreseeable future, no inflation concerns on the horizon at the moment. I wouldn't have expected (a move on futures), it was pretty much in-line, nothing too exciting and still pretty low."

JOSEPH TREVISANI, CHIEF MARKET STRATEGIST, WORLDWIDE MARKETS, WOODCLIFF LAKE, NEW JERSEY:

"Core inflation was low and unthreatening, but in truth neither matters to a Fed monetary policy committed to lowering unemployment."

ADAM SARHAN, CHIEF EXECUTIVE OF SARHAN CAPITAL IN NEW YORK:

"This confirms that inflation remains in check, which takes pressure off the Fed to raise rates. So far the market reaction is positive."

MARKET REACTION:

STOCKS: U.S. stock index futures held gains

BONDS: U.S. bond prices fell and yields rose

FOREX: The dollar was little changed against the euro and yen

(Americas Economics and Markets Desk; +1-646 223-6300)