U.S. inflation hit 3% in September, beating economist expectations and sending Wall Street to record highs as investors anticipate Federal Reserve rate cuts. However, the White House has raised concerns that the government shutdown could delay or eliminate the next inflation report, potentially causing economic disruption. Meanwhile, President Donald Trump hailed the strong stock market performance, citing newly released Labor Department figures showing a 3% inflation rate for the month, which is the highest since January and up from 2.9% in August.
Core prices also rose 3%, down from 3.1% in the previous month, while gasoline prices surged 4.1% following several months of declines. Despite these figures, the White House claims the data is a result of Trump’s economic agenda, while accusing Democrats of using the shutdown as leverage to fund healthcare for undocumented immigrants. This political conflict has raised concerns about the impact on economic reporting, with the administration warning that the shutdown may result in no October inflation report for the first time in history.
Republicans have blamed the shutdown on Democrats, arguing that they refused to fund the budget to reinstate taxpayer-funded medical benefits for illegal immigrants through Democrat lawmakers’ continuing resolution. Democratic leadership has disputed the claims, asserting that Trump and Republican lawmakers are actually behind the shutdown. The situation highlights the ongoing political tensions that could affect economic data releases and market stability, adding uncertainty to the financial landscape.
Meanwhile, the Federal Reserve is expected to cut interest rates again next week, as the inflation data has signaled a continued cooling trend. Economists estimate that the tariffs imposed by Trump are adding roughly 0.4 percentage points to annual inflation, though some duties have been reduced as part of trade deals. Businesses may pass on more costs to consumers in the coming months if the duties appear permanent. The mixed economic picture, with steady growth but slower hiring, continues to shape the market’s response to the ongoing political and economic challenges.