Evelyn Reynolds

The much-anticipated Trump-Xi meeting to address trade and tariff concerns is underway.
The two leaders met for a photo-op at the Gimhae Air Base in Busan, South Korea, before the meeting.

U.S. President Donald Trump greets Chinese President Xi Jinping ahead of a bilateral meeting at Gimhae Air Base on October 30, 2025 in Busan, South Korea.
Andrew Harnik | Getty Images News | Getty Images

Chinese President Xi Jinping said Thursday that Beijing and Washington should be “partners and friends,” at his meeting with U.S. President Donald Trump on addressing trade and tariff concerns.
The meeting concluded in about one hour and 40 minutes, according to Chinese state media, with the two leaders shaking hands before leaving the venue without making public comments.

This is the first time the two leaders met in person since Trump began his second term in January.
“We are gonna have a very successful meeting,” Trump said at the photo-op with Xi before walking into the meeting. While calling Xi “a very tough negotiator,” Trump played up his ties with the Chinese leader, saying that “we’ve always had a very good relationship.”
When asked whether the two leaders would finalize a trade deal at the meeting, Trump said “could be. We’ll have a great understanding.”
In his opening remarks, Xi said it was “normal for the two leading economies of the world to have frictions now and then,” while urging both sides to work together and “ensure the steady sailing forward of the giant ship” of bilateral relations, according to a statement released by the Chinese foreign ministry.
Xi also lauded Trump’s efforts aimed at solving regional conflicts while stressing China’s role in promoting peace talks on various issues. The Trump administration earlier this month had hinted that China played a limited role in Thailand and Cambodia ceasefire talks.

“Although the meeting itself is not about peace, [Xi] is mostly trying to create an atmosphere conducive to a deal,” said Tianchen Xu, senior economist at the Economist Intelligence Unit.

The high-stakes meeting comes as tensions between the world’s two largest economies have been on the boil this year. The latest escalation came this month, with Beijing  export controls and Washington threatening to ban software-powered exports to China. 
The U.S. in recent days has shared details about deals they hope to achieve with China – from restricting the flow of fentanyl to the U.S. to TikTok’s divestiture from its Beijing-based parent ByteDance. Tariffs, tech curbs and rare earths are also on the table for discussion.
Beijing had been more circumspect about the prospects of an agreement, but in a possible sign of thawing relationship, China bought its first cargoes of U.S. soybeans in several months, Reuters reported Wednesday. 
The Trump-Xi meeting may be more of a “tactical pause than a strategic breakthrough” with both sides contesting with disagreements core to the U.S.-China rivalry, including technology controls, supply chain and security frictions, said Han Shen Lin, China director at advisory firm The Asia Group.
“A temporary truce is better than an uncontrolled trade war,” Lin added.
Xi is in South Korea – his first state visit in 11 years – from Thursday to Saturday to attend the APEC Economic Leaders’ Meeting in Gyeongju.
Shortly before the meeting started, Trump said in a post on Truth Social that he had instructed the Pentagon to restart nuclear weapons testing, claiming that the U.S. has the world’s largest nuclear arsenal, followed by Russia and China.
The remarks were “bold and disruptive,” Lin said, adding that Trump was “forcing the room to focus on U.S. leverage” ahead of the meeting. “If it lands a trade win, it’s genius; if it poisons the well, we’re in for frostier summits ahead.”
Investors are cautiously watching for headlines from Busan as the trade war between the U.S. and China has kept investors on edge. Global markets soared at the start of the week on growing optimism that the U.S. and China could near an agreement on trade.
“A return to dialogue and engagement — no matter the near-term results — is critical to moving the U.S.-China relationship forward in the long term,” said Curtis Chin, chair of senior fellows at the Milken Institute, also a former U.S. ambassador to the Asian Development Bank.
That said, “headline-making deals and meetings will need to be followed by well-executed implementation and fulfillment of commitments by both sides,” said Chin. More

Faisal Alibrahim, Saudi’s economy minister, told CNBC the country was “reprioritizing a little bit towards sectors that need it the most.”
It comes after Riyadh launched an ambitious strategy, “Vision 2030,” to diversify its economy away from oil.
Now, technology and artificial intelligence are key priorities for the kingdom.

Digital render of NEOM’s The Line project in Saudi Arabia
The Line, NEOM

When Saudi Arabia first announced plans to reinvent its oil-based economy, huge infrastructure projects like the futuristic region NEOM and smart city The Line were championed as central to the transformation.
Almost a decade on from the launch of its “Vision 2030” transformation strategy, however, and Riyadh’s priorities have shifted with the times.

Now, technology and artificial intelligence are key priorities for the kingdom.
“We’re reprioritizing a little bit towards sectors that need it the most, and today it’s technology, artificial intelligence,” Faisal Alibrahim, Saudi’s economy minister, told CNBC Wednesday.
“We want to move into an economic structure that is productivity-led and at the heart of productivity is technology, innovation and generative AI,” he told CNBC’s Dan Murphy on the sidelines of the Future Investment Initiative (FII) in Riyadh.

Riyadh’s Vision 2030 strategy to diversify its economy away from oil has seen it invest heavily in tourism, cultural and sports events, technology and infrastructure.
“Our primary objective is non-oil growth and non-oil growth has been steadily increasing, this is our main driver of economic growth,” Alibrahim said, noting that non-oil activities now represent 56% of total real GDP in Saudi Arabia.

“All of our transformation efforts are to achieve non-oil growth so we can diversify our economy from having to rely on a single commodity price and how big the government budget is, but also to rely on private sector dynamism and to be ready for the future.”
Alibrahim said sectors like tourism had been performing far better than expected, with targets set for 2030 achieved years in advance, prompting the kingdom to up its target to 150 million visitors by the end of the decade, he said.

A key pillar of the Vision 2030 program is the creation of NEOM, an urban development project with a futuristic, car-free and zero-carbon city called The Line at its center.
It’s estimated that the entire NEOM project will cost $1.5 trillion, with The Line seen costing around $500 billion, but Saudi Arabia has looked to cut costs in recent years as its budget deficit has grown amid lower oil prices.
Alibrahim said “agility” and the ability to shift priorities and amend plans had become key parts of Vision 2030, noting that “the minute these plans aren’t solving for your optimal outcomes is the minute you need to re-plan and adjust.”
This shift in priorities has seen the technology, innovation and artificial intelligence sectors become more important areas of focus.

People come here ‘to make money’

Alibrahim told CNBC that Saudi was now seen as a land of opportunity for investors, as well as investment.
“People here stopped coming to Saudi to take money, they’re coming here to make money,” he said.
“Saudi stopped being only a source of capital to [being] also a capital of real economic opportunities,” he added. “We’re just unlocking the potential.”

Construction for The Line project in Saudi Arabia’s NEOM, October 2024
Giles Pendleton, The Line at NEOM

In September, the Saudi finance ministry estimated in a pre-budget statement that the budget deficit for 2026 will be 3.3% of GDP and that it was comfortable with that level.
“The government will continue to adopt expansionary spending policies that are contrary to the economic cycle, and [which are] directed towards national priorities with social and economic impact, and in a way that contributes to achieving the goals of the Saudi’s Vision 2030, and diversifying the economic base,” the ministry said in a statement.
It also forecast that the economy would expand 4.4% in 2025, which it said was supported by the growth of non-oil activities, and by 4.6% in 2026. On Wednesday, Alibrahim upgraded the 2025 forecast, stating that the kingdom’s 2025 real GDP growth will be 5.1%.
Saudi Arabia’s Finance Minister Mohammed Aljadaan has played down concerns over Saudi Arabia’s growing debt pile (albeit a relatively low one of 32% of GDP) and deficit.
“The ratio of public debt to GDP is still at relatively low levels compared to many other economies, and that it is within safe limits compared to the size of the economy, and is supported by financial reserves,” the minister said. More

Trump sealed rare earth supply deals with four Asian nations in a bid to counter Beijing’s market dominance.
Analysts say the effort could stabilize global prices and boost U.S. refining, but development will take years.
China’s export control threats have pushed more countries to align with Washington on critical mineral security, analysts say.

TOKYO, JAPAN – OCTOBER 28: U.S. President Donald Trump (L) and Japanese Prime Minister Sanae Takaichi (R) hold up signed documents for a critical minerals/rare earth deal with Japan during a meeting at Akasaka Palace on October 28, 2025 in Tokyo, Japan.
Andrew Harnik | Getty Images News

U.S. President Donald Trump’s push to secure rare earth supply deals across Asia will ultimately weaken China’s dominance in the global supply chain for critical minerals — but analysts said the buildup will take years.
Over 10 days, Trump cemented deals with Australia, Malaysia, Cambodia and most recently, Japan, to bolster the supply of rare earths and other critical minerals that are crucial for the making of batteries, automobiles, defense systems and computing chips.

The flurry of deals — part of Washington’s bid to counter Beijing’s chokehold on the sector — comes ahead of his meeting with Chinese President Xi Jinping in Busan on Thursday.
The deals may “benefit immensely from being linked together in a plurilateral agreement with strong commitments, financing and pooling of resources,” said Wendy Cutler, senior vice president at Asia Society Policy Institute. She expects more of such deals to follow under the Trump administration.
Trump and Xi are expected to address several contentious issues that have stalled the long-running trade talks, including Beijing’s rare earth export controls and Washington’s tariff threats and technology restrictions.

In the medium term, we will get off the Chinese supply chain, but in the short term, there’s still a great deal of dependency on China.

Dennis Wilder
Senior fellow at Georgetown University

The most recent win for Trump was an agreement with Japan aimed at securing the supply of raw and processed critical minerals while also pledging funding for selected projects within the next six months. Earlier pacts with Australia, Malaysia and Thailand also outlined multibillion-dollar plans, commitments to fair trade practices and to avoid export bans or quotas.
While Trump’s deals will bring much-needed financial support to the industry and may eventually challenge Beijing’s stranglehold over rare earths, experts said the efforts will be costly and take years to bear fruit.

“What we are trying to do now is to get off the Chinese as the primary supply chain, but that will take time,” said Dennis Wilder, a former senior U.S. intelligence official and now a senior fellow at Georgetown University.
“In the medium term, we will get off the Chinese supply chain, but in the short term, there’s still a great deal of dependency on China,” Wilder stressed.
Goldman Sachs estimates new rare earth mines tend to take up to a decade to develop, with known reserves for certain elements “very scarce” outside of Myanmar and China, while building refineries would take about 5 years.
China dominates 69% of the market share for rare earth mining, 92% of refining and 98% of magnet manufacturing, the bank estimates.

Level playing field

These deals are a “game-changer” that could reduce the U.S. vulnerabilities to Beijing’s export controls, stabilize rare earth prices and accelerate domestic innovative refining and recycling, said Brodie Sutherland, CEO of Patriot Critical Minerals Corp, a U.S.-based critical minerals developer.
With assured access to raw materials from friendly nations, American firms can focus on efficient extraction, ethical mining and value-added processing, said Sutherland.
He also cited longer-term benefits such as lower risk premiums on financing, faster permitting for new sites and a “level playing field against subsidized foreign competitors.”
China has allowed rare earth prices to swing in very “strategic” ways to make projects in other countries unprofitable, said Mike Rosenberg, a professor of strategic management at IESE Business School.
By using public funds to back these projects, global miners and refiners ought to be able to make investments that guarantee a reasonable return, Rosenberg added.
Efforts to diversify and reshore production, however, will inevitably mean accepting some environmental tradeoffs, experts said.
Mining and refining rare earth materials in an ecologically friendly way is “very, very expensive,” Rosenberg noted, while China kept costs low by limiting environmental controls.
“Consumers may need to accept higher prices for electronics and green technologies that reflect their true material and environmental cost,” said Patrick Schröder, a senior research fellow at the Environment and Society Center at Chatham House.
The policy push has also fueled a rally in several U.S.-listed rare earth miners this year. New York-listed shares of MP Materials and Trilogy Metals have each more than quadrupled, Energy Fuels has tripled, while Critical Metals is up nearly 90% and USA Rare Earth about 75%, according to LSEG data.

Wake-up call

Trump likely rushed to sign these deals to gain leverage ahead of his meeting with Xi in Seoul this week, analysts said.
U.S. officials said earlier this week that they expected China to delay imposing export controls on critical minerals for a year as part of a broader trade deal, briefly cooling a rally in mining stocks.

“Beijing’s latest threat on sweeping extraterritorial export restrictions in this sector has served as a needed wake-up call to partners around the world,” said Asia Society Policy Institute’s Cutler.
China may have miscalculated with the export controls that rattled the global economy and widened the trade war to include other nations, said Wilder of Georgetown University, noting that “it wasn’t in China’s interest.”
“It was a useful weapon when it was targeted at the U.S., but it becomes less useful when you try and expand that to the rest of the world,” Wilder said. “Because then you bring the rest of the world over to the U.S. in many ways.” More

Trump-Xi meeting follows an escalation in U.S. and China trade tensions.
The U.S. has imposed 20% fentanyl-linked tariffs on Beijing.
Trump said he might discuss Nvidia’s advanced AI chips with China.
On Taiwan, Trump said he was not sure if it would be on the agenda.

TOKYO, JAPAN – OCTOBER 27: U.S. President Donald Trump disembarks Air Force One as he arrives at Haneda Airport on October 27, 2025 in Tokyo, Japan.
Takashi Aoyama | Getty Images News | Getty Images

U.S. President Donald Trump said he expects to lower fentanyl-linked tariffs on China as Beijing confirmed a high-stakes meeting between Chinese President Xi Jinping and the American leader.
A spokesperson for Chinese Foreign Ministry said Wednesday that Xi will meet Trump in Busan, South Korea, on Thursday to exchange views on issues of shared concerns, without elaborating.

“We are willing to work with the U.S. to push the meeting toward achieving positive outcomes,” the spokesperson said in Mandarin, translated by CNBC.
Earlier on Wednesday, Trump told reporters aboard the Air Force One that fentanyl flows into the U.S. and “farmers” will be among topics he expects to discuss with Xi on Thursday.
When asked whether the potential one-year pause in Beijing’s implementation of rare earth export controls would be enough to draw more concessions from the U.S., Trump said “we haven’t talked about the timing yet but we are gonna work out something.”
The two leaders’ meeting — their first in-person sit-down since Trump’s return to the office in January — comes as bilateral tensions have escalated in recent weeks. Beijing has turned up the heat on rare earth export controls, while Washington has retaliated with port fees on Chinese ships and threatened software-related export restrictions.
A delicate trade detente between the world’s top two economies that includes lower tariffs on each other’s goods is nearing its expiration on Nov. 10, if they fail to agree on another extension. Trump has also threatened additional 100% tariffs on Beijing starting Nov. 1.

The Wall Street Journal on Tuesday reported that the U.S. could cut the 20% fentanyl-related tariffs on Chinese exports by half, in return for Beijing’s crack down on the export of chemicals that make fentanyl. If Washington were to lower those tariffs to 10%, that would bring the average duty on most Chinese imports — currently around 55% — to about 45%.
On whether Taiwan would be on the agenda, Trump said “I don’t know if we’ll even speak about Taiwan. He may want to ask about it. There is not that much to ask about it.”
Answering a question about exports of Nvidia’s Blackwell chips to China, Trump said “I think we may be talking about that with President Xi.”

In a speech at the Asia-Pacific Economic Cooperation, or APEC, summit on Wednesday, Trump said that he hoped to reach an agreement with Xi, which will be “a good deal for both.” The U.S. will also finalize a trade agreement with South Korea “very soon,” he added.
Chinese President Xi will also deliver a speech at the summit and hold bilateral meetings with foreign leaders, a spokesperson of the ministry said last Friday.
The U.S. president kicked off his whirlwind Asia trip on Sunday, signing a flurry of trade and mineral agreements with Southeast Asian leaders and most recently Japan.
Likely outcomes from the Trump-Xi meeting include Beijing’s guarantee of ensuring the U.S. access to rare earth items under its export-control measures, purchases of Boeing aircraft, approval for the sale of TikTok’s U.S. operation and more efforts on curbing fentanyl flows, according to Neo Wang, China strategist at Evercore ISI.
In return, the U.S. could offer to loosen export controls on certain semiconductor equipment and AI chips, roll back the 100% tariff threat, in addition to a reduction of 10 percentage points in the fentanyl-linked tariffs, starting from Nov. 10 as part of a renewed tariff truce, Wang said.
“We expect Beijing to give Trump a way out on the fentanyl deadlock, such as via a new promise from Xi in person, to facilitate Trump’s reduction on China fentanyl tariff, effective no later than Nov. 10,” Wang added.

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Private sector employers added an average 14,250 jobs per week over the past four weeks, according to new preliminary data being released by ADP, a turnaround from the negative September numbers.
Stepping into the void created by the government shutdown, ADP will now release a four-week average weekly change in employment with a two-week lag every Tuesday. Today’s number is the four-week average ending Oct. 11.

“ADP’s near real-time employment data, released weekly, will now provide an even clearer picture of the labor market at this critical time for the economy…providing a dynamic view of job creation and loss at an unprecedented level of weekly detail,” said Nela Richardson, chief economist at ADP.
This preliminary data will be different from the better-known and closely followed National Employment Report, generally released on the Wednesday before the government’s payroll number. The NER measures the monthly change in job growth during the week that contains the 12th of the month and provides detail of job growth by sector.
The preliminary data, which can serve as a guide to the monthly data, offers a four-week moving average of weekly job growth. It will be revised monthly with the release of the NER.
The 14,250 increase suggests monthly job growth totaled around 55,000 for the 4-week period, compared with a loss of -32,000 reported for September in the NER. However the total is subject to revision with the release of the NER. More

The global trade system has remained resilient despite the U.S.’ introduction of import tariffs on multiple goods from multiple countries, the WTO’s chief told CNBC.
Trump, the architect of U.S. tariffs, is due to meet China’s Xi Jinping this week.

A cargo ship is loading and unloading foreign trade containers at Qingdao Port in Qingdao City, Shandong Province, China on July 28, 2025.
CFOTO | Future Publishing | Getty Images

Global trade is not broken, despite the disruption, pressure and shock of trade tariffs introduced by the U.S. this year, the head of the World Trade Organization (WTO) told CNBC Tuesday.
“Many people have the impression that, because of the unilateral actions of the U.S., that global trade is broken. Yes [they’ve] been a great disruption — the greatest disruption of global trade in 80 years — but we are pleased to see the resilience of the system,” WTO Director-General Ngozi Okonjo-Iweala said.

“The system is battered, it’s bruised, but it’s still standing,” she told CNBC’s Dan Murphy on the sidelines of the Future Investment Initiative in Saudi Arabia.
Okonjo-Iweala’s comments come as U.S. President Donald Trump, the architect of multiple U.S. tariffs on foreign imports to the States, continues a tour of Asia in which he has signed trade deals and truces, so far.
But the big prize for Trump will be whether he and Chinese President Xi Jinping, who are due to meet Thursday, can come to a deal to reduce duties and counter-tariffs on a range of each other’s goods. Trump said Monday that Washington and Beijing were poised to “come away with” a trade deal, raising market hopes.

“We do wish that the meeting goes very well,” Okonjo-Iweala said, noting that any de-escalation in trade tensions would be welcome.
“Any threat of disconnect and conflict between China and the U.S. in trade is not good for either country or for the world. Any threat of fragmentation or division between the two, into two global trading camps, will lead to losses in global welfare, and the poorer countries will be harder hit,” she said.

WTO forecast 

Earlier in October, the WTO hiked its forecast for global trade growth in 2025, but warned the outlook for 2026 had deteriorated.
Despite predicting that trade volume growth would stand at 2.4% this year, up sharply from a previous estimate of 0.9% in the trade body’s August report, the WTO slashed its previous expectation of 1.8% trade volume growth next year to a lackluster 0.5%.
It cited a cooling global economy and the impact of higher tariffs as a reason for the revision.
Trade tariffs have become a dominant feature, and headwind, for global commerce since U.S. President Donald Trump shocked friends and foes alike with his widescale tariffs regime in April.
Countries scrambled to reach trade deals with the White House but even allies, such as the U.K., have seen a baseline 10% tariff remain on goods exported to the U.S.
Global trade volumes rose sharply in the first half of 2025 — up 4.9% year on year — with several factors contributing to the robust expansion.
These included the front-loading of imports into the U.S. in anticipation of higher trade tariffs, and favorable macroeconomic conditions with disinflation, supportive fiscal policies and tight labor markets boosting real incomes and spending in major economies, the WTO said.
Strong growth in emerging markets and increased demand for artificial intelligence-related goods — including semiconductors, servers and telecommunications equipment — also fueled global trade growth, it added, with AI-related spending driving nearly half of the overall trade expansion in the first half of the year, rising 20% year on year in value terms.
Global competition when it comes to developing AI-related products has heated up.
The WTO noted that the U.S. accounted for roughly one-fifth of global AI-related trade growth in the first half of 2025. The bulk of the expansion came from Asia, however, which accounted for nearly two-thirds of global AI-related trade growth in the same time period. More

A shopper at a grocery store in Dayton, Ohio, Oct. 21, 2025.
Kyle Grillot | Bloomberg | Getty Images

The Bureau of Labor Statistics on Friday released its much-anticipated consumer price index report, delayed a week and a half because of the government shutdown.
Here are the five most important takeaways:

While inflation is still running well ahead of the Federal Reserve’s 2% goal, it’s showing no signs of runaway and in fact is easing, at least a bit, in some key areas. The headline gain of 0.3% monthly and 3% annually both were slightly below consensus forecasts. Same for core CPI excluding food and energy, which ran at 0.2% monthly and 3% annually.
Markets continued to price in a near certainty for a Fed rate cut next week, and upped the odds for another in December, with just a 4% probability the central bank won’t ease two more times before the end of the year, according to the CME Group’s FedWatch.
Aside from the headline numbers, the biggest watch point for markets was tariff and immigration impacts, which showed up — a little. Apparel prices rose 0.7% and sporting goods costs jumped 1%. But smartphone prices declined 2.2% and are down 14.9% year over year. Gardening and lawn care services, an immigration-related category, posted a 13.9% annual increase.
Shelter costs are another key category, as they make up one-third of the weighting in the index. There was some relief on that front, with the index up just 0.2% monthly and holding at 3.6% annually. Owners equivalent rent, a critical component of shelter costs that asks homeowners what they could fetch in rent, rose just 0.1%, the smallest such move for the measure since November 2020.
With government data collection and reports under suspension because of the shutdown, the BLS compiled this report only because of its role as a benchmark for Social Security cost-of-living adjustments. This, then, likely will be the last official data report released until the impasse is resolved.

What they’re saying:

“In aggregate today’s inflation readings are encouraging, albeit still above the Federal Reserve’s stated 2% inflation target. Yet, we think the overall inflation trend can continue to moderate over the next year … as inflation breakevens have recently suggested, allowing the Fed to maintain its bias toward rate cuts.”
— Rick Rieder, head of fixed income at BlackRock and a finalist to succeed Jerome Powell as Fed chair next year

“Look beneath the headline and what one sees on a year ago basis are large increases in the cost of food, meat, housing, and utilities. Middle class & down-market households experiencing a slowing pace of wage growth are clearly having difficulty adjusting to persisting increases in the cost of living … It’s only natural that those that inhibit the lower spur of the K ask: what is it that those celebrating a more modest increase in the pace of price increases see that indicates inflation is not eroding my bottom line & standard of living?”
— Joseph Brusuelas, chief economist at RSK, on the K-shaped economy

“Signs of spillovers from tariffs remain weak and support the view that tariff hikes will translate into a one-off bump in prices instead of persistent inflationary pressures.”
— Krishna Guha, head of global policy and central bank strategy at Evercore ISM More

The consumer price index showed a 0.3% increase on the month, putting the annual inflation rate at 3%, both lower than expected.
Excluding food and energy, core CPI showed a 0.2% monthly gain and an annual rate also at 3%, also less than forecasts.
The BLS released the data specifically because the Social Security Administration uses it as a benchmark for cost-of living adjustments in benefit checks. Otherwise, the federal government has suspended all data compilation.

Prices that people pay for a variety of goods and services rose less than expected in September, according to a Bureau of Labor Statistics report Friday that keeps the door wide open for another interest rate cut next week.
The consumer price index showed a 0.3% increase on the month, putting the annual inflation rate at 3%. Economists surveyed by Dow Jones had been looking for respective readings of 0.4% and 3.1%. The annual rate reflected a 0.1 percentage point uptick from August.

Excluding food and energy, core CPI showed a 0.2% monthly gain and an annual rate also at 3%, compared to respective estimates of 0.3% and 3.1%, the latter being unchanged from a month ago. Core CPI on a monthly basis had posted 0.3% gains in both July and August.
The CPI reading is the only official economic data allowed to be released during the government shutdown.

A 4.1% jump in gasoline prices was the largest contributor to a report that otherwise showed inflation pressures fairly muted. Food prices showed a 0.2% increase. Commodity prices overall rose 0.5%. On an annual basis, energy was up 2.8% and food rose 3.1%.
Within the food index, prices for meat, poultry, fish and eggs surged 5.2% in the past year, while nonalcoholic beverages increased 5.3%. In energy, while electricity (up 5.1%) and natural gas (11.7%) prices pushed higher over the past year, gasoline actually fell 0.5% during the period.
Shelter costs, which comprise about one-third of the weighting in the CPI, rose just 0.2% and were up 3.6% from a year ago. Services excluding shelter costs also were 0.2% higher.

New vehicles saw a 0.8% increase, but used cars and truck prices fell 0.4%.

Stock market futures added to gains following the release, while Treasury yields were slightly negative.
“Inflation might not be slowing but it’s not surprising to the upside anymore,” said David Russell, global head of market strategy at TradeStation.
The report provides a glimpse into the state of the U.S. economy at a time when all other data releases have been suspended. There were only limited impacts from President Donald Trump’s tariffs, though they likely have not made their way fully through the economy yet.

Core goods prices saw just a 0.2% gain on the month. Data within the CPI report, combined with the Customs revenue generated by tariffs, indicate a “realized” tariff rate of just 10%, according to James Knightley, chief international economist at ING.
There are signs of “a strong substitution effect already coming through – US companies switching to lower tariff countries for their product sourcing with the composition of imports shifting,” Knightly wrote.
“The result is companies are better able to absorb these more modest than feared cost increases and there has been less impact on inflation than predicted so far,” he said. “In time we expect the realized tariff rate to rise and goods prices to be more heavily impacted, but we continue to argue that tariffs will be a one-off step change in prices rather than something that will lead to more persistent inflation.”

Final report before the Fed

The BLS released the data specifically because the Social Security Administration uses it as a benchmark for cost-of living adjustments in benefit checks. Otherwise, the federal government has suspended all data compilation and releases until the fiscal impasse is settled in Washington, D.C. CPI originally was scheduled for release Oct. 15.
In addition to providing a COLA guide, the CPI release is the final significant data point the Federal Reserve will get before it makes its interest rate decision next week. The Fed has a 2% inflation goal. The headline measure was last below that level in February 2021.

A shopper looks at a sales advertisement at a grocery store in West Milton, Ohio, US, on Tuesday, Oct. 21, 2025.
Kyle Grillot | Bloomberg | Getty Images

“This report will clearly keep the Fed on track to cut rates,” said Art Hogan, chief market strategist at B. Riley Wealth. “The Fed has been clear that they are more focused on the softening labor data and will continue to defend their full employment mandate, even with core CPI well above their 2% target.”
Markets are pricing in a near-certainty that the central bank lowers its benchmark overnight borrowing rate by a quarter percentage point from its current target range of 4%-4.25%. Traders also are anticipating another cut in December.
However, the path after that is much less clear.
Worries persist that President Donald Trump’s tariffs could cause another round of painful inflation. At the same time, Fed policymakers worry that a slump in hiring this year could spread, though layoffs remain low.
Tariff-sensitive apparel prices saw a 0.7% increase in September, while durable goods moved 0.3% higher.
Chair Jerome Powell and his colleagues have expressed generally cautious tones about the pace of rate cuts as they weigh the threat of inflation against weakness in the labor market. For his part, Trump has insisted that inflation is no longer a problem and the Fed should be cutting aggressively. More