Nick Timiraos, a reporter for The Wall Street Journal, pointed out that unlike the unexpected rise in August's core CPI, September's month-over-month increase in core CPI was more broad-based. Specifically, core goods prices rose 0.25% month-over-month, the largest monthly increase in a year; housing costs increased by 0.39%; and core services excluding housing rose by 0.42%. The 3-month annualized increase in core CPI surged from 1% in July to 4.6% in September.

This data has significant implications for Federal Reserve policy: the market will closely watch the Q&A with Federal Reserve Chairman Warsh at the IMF meeting in Thailand on Thursday at 11:30 PM ET. The market's probability of a rate hike in October has already risen to 50%. Although the Federal Reserve previously indicated a high bar for consecutive meeting rate hikes, this report might change its stance, at least strengthening the case for another rate hike in December.