MNI BRIEF: US CPI Upside Surprise Leaves Fed On Course For 75

Another upside surprise on U.S. CPI inflation Thursday is likely to seal the deal for a fourth straight 75-basis-point interest rate increase when the Federal Reserve meets again next month. Treasuries fell on the data as the market locked in a 75-basis-point move in November. (See MNI INSIGHT: Fed Sees Fin. Stability As Separate From Rates)

Core CPI jumped 0.576% from a month earlier, just an edge higher than the 0.567% increase recorded in August and two-tenths higher than market expectations. It was up 6.6% from a year earlier, the highest since 1982. Core services inflation accelerated to 0.8% from 0.6% in August, while core goods inflation was close to flat. The large owners' equivalent rent category hit a cycle high of 0.8% even as some analysts looked for a slight moderation.

Headline CPI rose 0.386%, also two-tenths stronger than expected, adding up to a 8.2% increase from a year earlier. Headline inflation peaked in June at 8.9% as energy prices have retreated.