Wall Street Sees Inflation Easing Even With Oil Above $90
Rising Gasoline Prices Fuel Fresh Inflation Fears in the U.S.
Trump defended his controversial Russian… Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com.
Consumer Price Index (CPI) report is due to be released on Wednesday, witheconomists predictingthat key inflation metrics continued to moderate in September despite elevated oil prices, giving the Fed room to slow down on interest rate hikes.
For September, economists expect headline inflation growth to clock in at 0.5% month-over-month and 3.6%- 3.7% year-over-year, up from 0.4% m-o-m and 3.4% Y/Y in August.Meanwhile, core CPI, which excludes volatile energy and food prices, is seen climbing 0.2% in September, down from August’s 0.3%, with the annual core inflation rate expected to hold steady at 2.4%.
Additionally, the probability of a Federal Reserve interest rate hike at the upcoming October 27–28 meetinghas droppedto around 19% to 20%, down significantly from over 70% in late September.
“You’ve seen supply shocks create a sticky situation,” Jeffrey Schulze, head investment strategist at the Franklin Templeton Institute, told Morningstar, referring to oil supply disruptions, tariff shocks and AI-related consumer goods’ price spikes.
“But as we move toward 2027, some of these risks are going to start to moderate.
I think you see softening across the board [in September].” While the headline inflation is already exposing the impact of rising crude prices, economists note that broader core inflation categories have remained insulated, showing little to no evidence of pass-through pricing.
Airfares have absorbed the brunt of ongoing energy shocks, with price increases exceeding 2% m-o-m in both July and August and 25% Y/Y thanks to elevated jet fuel costs.
Fuel represents roughly 17% to 21% of an airline's total operating expenses, making ticket pricing uniquely sensitive to oil price spikes.
In contrast, pass-through effects for most retail and manufacturing sectors can take several months or even quarters to manifest.
“I think that’s going to be something that potentially shows up closer toward the end of the year, rather than in the September release,” says Schulze.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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