Dollar and Treasury yields rise as US inflation reaches 3.7%

The dollar and US Treasury yields rose on October 14 after September consumer price data showed annual inflation accelerating to 3.7% from 3.4%, according to the Bureau of Labor Statistics.

The annual increase exceeded the 3.6% consensus forecast cited by Interfax from Trading Economics. Prices rose 0.6% from August, matching expectations, after a 0.4% monthly increase in August.

Excluding food and energy, prices increased 2.6% over a year and 0.3% over a month. Analysts had expected 2.5% and 0.2%, respectively. August's corresponding readings were 2.4% and 0.3%.

Interfax reported that market pricing put the probability of an October Federal Reserve rate increase at 49.3%, up from 21.6% before the release. Those figures describe investor expectations rather than an announced policy decision.

The ten-year Treasury yield climbed 9 basis points to 5.3%, approaching its highest level since early 2002. The two-year yield rose 12 basis points to 4.9%.

The euro fell 0.5% against the dollar and sterling lost 0.3%, while the dollar gained 0.3% against the yen. These were post-release market snapshots rather than closing prices.