US inflation is heating up across the board, markets ramp up expectations of the Federal Reserve's interest rate hikes.

Driven by a rebound in fuel prices amid the Iran-related conflict, the U.S. unadjusted annual CPI rose to 3.7% in September, further intensifying cost-of-living pressures on American households as the November midterm elections approach. The unadjusted core CPI annual rate climbed to 2.6% from 2.4% in August. After the data release, U.S. Treasury yields jumped, international gold and silver prices plunged, the U.S. dollar index strengthened, and markets increased bets on three more Federal Reserve interest rate hikes by the end of 2027. The data from the U.S. Bureau of Labor Statistics marks the first rebound in U.S. inflation since May, underscoring that energy price shocks from the Middle East conflict continue to impact the world's largest economy. Following the outbreak of the conflict, gasoline and diesel prices spiked, then eased in the summer, but in recent months, as tensions escalated, fuel prices have risen again, pushing diesel prices to record highs. U.S. President Trump has been seeking to curb the impact of rising energy prices. Polls show that voters dissatisfied with the status quo may channel their discontent toward the Republican Party in next month's midterm elections, which will determine control of Congress.