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.
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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.
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."
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)