Fed’s preferred inflation gauge rises to 3.6 percent in September

The personal consumption expenditures price index, the Federal Reserve's preferred inflation metric, rose 0.5 percent in September and reached 3.6 percent year-over-year, according to data released Thursday by the Bureau of Economic Analysis. This follows a dip to 3.4 percent in August and marks a return to levels near a three-year high.

Energy costs drove much of the increase, with gas and other energy goods prices jumping 9.2 percent from August to September. The surge continues a trend linked to the Iran war, which has disrupted shipping in the Strait of Hormuz and pushed oil prices higher for six of the nine months this year.

Core inflation, which excludes volatile food and energy prices, stood at 3.1 percent in September, up from 3 percent in August. The Federal Reserve held interest rates at a range of 3.75 to 4 percent on Wednesday, with Chair Kevin Warsh noting that the recent rate hike is beginning to show effects but that no firm conclusions have been reached regarding future policy.

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