U.S. inflation rises to 3.7% in September

Annual inflation in the United States rose to 3.7% in September, from 3.4% in August, amid another increase in fuel prices caused by the war in Iran. The data was published on Wednesday and exceeded the 3.6% estimate by economists surveyed by Bloomberg.

Core inflation, which excludes food and energy prices, rose from 2.4% to 2.6%, also exceeding Wall Street analysts’ expectations. The development is putting pressure on the US population ahead of the legislative elections in November and fueling fears of further interest-rate hikes by the Federal Reserve.

After the data was released, yields on US government bonds rose. The yield on two-year Treasury notes reached 4.91%, up 0.13 percentage points, signaling that investors anticipate a tighter monetary policy.

President Donald Trump is trying to limit the economic effects of the conflict in the Middle East, as voter dissatisfaction could hurt the Republican Party in the November election. Last week, Trump announced an agreement with Vladimir Putin to supply diesel fuel to US and international markets: more than 300,000 tons immediately, 500,000 tons in November, and another one million tons later.