US September CPI: Inflation arrived hot in September on the back of rising energy prices, transportation costs and consumer electronics all combined to drive the CPI 0.6% higher on the month and 3.7% from one year ago. Core inflation advanced at a 0.3% m/m & 2.6% pace y/y. Real average hourly earnings were down 0.1% and declined 0.7% from one year ago. Gasoline prices were up 9.1% and fuel oil 15.3% on the month. Service sector prices increased 0.4% and are up 3.1% from one year ago. The topline inflation implies real wages declined for the sixth consecutive month which is intensifying the very real cost of living crisis that a majority of American households are experiencing. The September CPI data provided little in the way of disinflation evidence. This points towards more than one additional rate hike from the Fed. The problem is not an accelerated broadening out of inflation. The problem is stubborn and sticky inflation that is not going to decline below 3% in topline CPI, PCE or more importantly core PCE anytime soon which will demand a higher policy rate. The data, which captures volatile energy, oil and distillate dynamics due to the war in Iran, is likely not sufficient to push the Fed to hike rates at its October meeting. That will wait until December where we see a 25-basis point hike to close out the year.