US Economy Faces Persistent Inflation Risks as 'Trumpflation' Broadens

Core inflation in the US remains stubborn at 3.3%, suggesting that inflationary pressures linked to President Donald Trump's tariffs and the conflict in Iran have spread beyond energy costs into the broader economy. Diesel prices reached a record $6.50 per gallon in September, and core PCE has remained above the Federal Reserve's 2% target for 65 consecutive months. Despite a 0.25% interest rate hike by the FOMC on September 16, market valuations remain near historic highs, raising concerns about the sustainability of the current rally.