US Inflation Hits 3.7% in September 2026, Doubling the Odds of an October Fed Hike

US inflation rose to 3.7% in September 2026, the Bureau of Labor Statistics reported on October 14, above the 3.6% economists expected and up from 3.4% in August. Within hours, futures markets roughly doubled the odds that the Federal Reserve raises rates again at its October 28 meeting, to about 42%.

For anyone holding dollars, borrowing in dollars or buying property priced in dollars, which includes the whole Dutch side of Sint Maarten, this was the most important data release of the month.

The numbers

From the BLS consumer price index release for September 2026:

• Headline CPI: up 0.6% in the month, 3.7% over 12 months.

• Core CPI (excluding food and energy): up 0.3% in the month, 2.6% over 12 months, against 2.5% expected and 2.4% in August.

• Energy: up 20.4% over 12 months. Gasoline alone rose 9.1% in September and 34.2% on the year.

• Shelter: up 0.4% in the month and 3.2% over 12 months.

• Food: up 2.5% over 12 months.

Markets moved fast. CME FedWatch put the probability of a quarter-point hike on October 28 at about 22% before the report and between 41% and 44% on October 14. A hike would lift the federal funds target range from 3.75%–4.00% to 4.00%–4.25%. Treasury yields rose, with the 10-year near 5.3% and the 2-year near 4.9%, according to CNBC.

Mortgage rates did not fall. Freddie Mac's weekly survey on October 15 put the average 30-year fixed rate at 7.40%, unchanged from the week before and the eighth straight week without a decline. A year ago it was 6.27%. The 15-year rate was 6.71%.

Why it matters

The decision falls in election week. The October 28 meeting, the second under Chair Kevin Warsh since the Fed resumed hiking in September, comes six days before the November 3 midterm elections. A Fed hike within a week of Election Day has happened only once since 1990, in November 2022. Some economists expect the Fed to wait until December 8–9. Others, like Dustin Thackeray of Crewe Advisors, say a second consecutive hike is "firmly on the table." New York Fed President John Williams said on October 13 he expects inflation near 2% next year.

Energy is doing most of the damage. With crude above $100 a barrel, core inflation at 2.6% looks far less alarming than the 3.7% headline. That gap is what makes the October call hard.

Financing costs stay high. On a US$500,000 30-year loan, 7.40% means a monthly payment of about $3,462 in principal and interest, against about $3,085 at last year's 6.27%. That is roughly $377 more every month. Buyers who plan to fund a Caribbean purchase with a US home equity line or a cash-out refinance are paying the same higher rates.

The dollar link. The Caribbean guilder is pegged at 1.79 to the US dollar, and the Central Bank of Curaçao and Sint Maarten raised its own policy rate to 4.50% on September 17. US rate moves feed into local deposit and lending rates over time, and into the US-dollar prices on the Dutch side.

Our read

We are not in the business of predicting the Fed. What we can say is how this lands with our clients. Most of our buyers in Simpson Bay, Cupecoy, Maho and Indigo Bay pay cash or use funds from a sale at home, so a quarter point in Washington rarely changes whether they buy. It does change how they feel about it, and how long they wait.

The more practical effect is on the sale back home. Higher US mortgage rates thin the pool of buyers for a house in New Jersey, Florida or Connecticut, and that is often what funds a purchase here. If you are planning to sell in the US to buy in Sint Maarten, it is worth lining up both sides of the move now. This is not financial advice: talk to your lender or adviser about your own rate exposure.

On the island, the question we hear most is whether local banks will follow. That depends on the CBCS, which meets on its own schedule. For the costs of borrowing here as a non-resident, see our financing guide, or talk to our team.

Sources: US Bureau of Labor Statistics, CPI release, October 14, 2026; CME FedWatch via CNBC and Yahoo Finance, October 14–15, 2026; Freddie Mac Primary Mortgage Market Survey via Trading Economics, October 15, 2026; Kiplinger, October 14, 2026; The Mortgage Reports, October 14, 2026.