The US consumer price index rose 8.2% in the year through
September, another stubbornly high result driven by more expensive food, rent,
and other commodities. The core CPI, which excludes volatile food and energy
prices, surged 6.6% from a year earlier, accelerating from 6.3% in August and
marking the biggest increase since August 1982. On a monthly basis, the core
index increased by 0.6% in September, the same as in August.

The key gauge of US consumer prices hit a 40-year high in
September, showing the central bank’s efforts have so far had little effect.
Traders are now betting the Federal Reserve will now raise interest rates to 5%
before stopping its rate hikes next spring.

Also Read | Is it better to invest in real estate during surging inflation?

US Markets

Stocks opened lower on Thursday, continuing the slump that
started after the September CPI inflation report came in hotter than expected.
The Dow Jones Industrial Average plunged 500 points or 1.73%. The S&P 500
tumbled 2.10% and the Nasdaq Composite slipped 2.80%.

Treasury Yields

US Treasury Yields surged after the inflation report was
released. The benchmark 10-year Treasury yields rose 17 basis points to 4.07%.
The two-year Treasury yields, which are more sensitive to Fed rate hikes,
jumped more than 22 basis points to 4.51%.

Yields move opposite of bond prices. The significant rise
in interest rates this year means there has been a big sell-off in bonds,
making this year’s markets painful even for investors who invested heavily in
fixed income.

Also Read | How to survive a market crash

US Dollar Index

The dollar was rising after the latest US CPI data exceeded
forecasts, supporting the case for further aggressive interest rate hikes. The
DXY dollar index was recently up 0.4% to 113.74, from 112.82 earlier.

European stock markets

European stocks reversed gains on Thursday after another
hot reading from the US. The region-wide STOXX 600 index fell 1.3% after rising
as much as 0.8% earlier in the session following reports that the UK government
was discussing making changes to the financial plan announced last month that
sparked a round in bond markets.

Also Read | Why US inflation is going up and when will it come down

Gold and Silver

Gold and silver prices are down in early US trading on
Thursday. The precious metals are witnessing selling pressure after the US
dollar index recovered from overnight losses and US bond yields have up-ticked
following the report. The December gold futures was last down $16.10 at
$1,662.00 and December silver futures was down $0.443 at $18.485. 

Also Read | US inflation rate eases slightly | A timeline: 1930-2022

Oil

Oil prices fell sharply. Crude WTI Futures was down 0.5% to
$86.61 per barrel and Brent Crude Futures was down 0.2% to $92.26 per barrel.

Cryptocurrency

Cryptocurrency prices slipped on Thursday to new October
lows after key inflation data came in higher than expected. The price of Bitcoin
slumped 4% to $18,388.00 and Ethereum fell 6% to $1,216, according to Coin Metrics.

Also Read | Current global crisis and hyperinflation in post-World War I Germany

Cryptocurrencies have been trading mostly sideways since August,
with the Bitcoin hovering near $19,000. That’s been a key level to watch for
experts, who say fall below it could lead to new lows below those hit in June,
when the Bitcoin fell below $17,800 and Ethereum fell under $900.