The long-awaited September CPI report from the Bureau of Labor Statistics is out, and it brought some relief for markets. The US Consumer Price Index (CPI) rose 3.0% year-over-year in September, slightly below the market consensus of 3.1% and just a tick above August’s 2.9%. The data suggest that inflation might finally be cooling, with the monthly CPI climbing 0.3%, reflecting the impacts of energy, rent, and various everyday goods.

Core CPI, which strips out volatile food and energy categories, also rose 3.0% year-over-year and 0.2% month-over-month—both measures coming in a bit softer than expected. That’s a sign that underlying price pressures may be moderating.

While inflation remains above the Federal Reserve’s 2% target, this cooler-than-expected report gives the Fed some breathing room as it heads into its policy meeting next week. Many investors and analysts now speculate that the pressure for further rate hikes may have eased.

Overall, the September CPI reveals that while inflation is still elevated, the trend looks more manageable than feared. All eyes will be on the next few months to see if inflation keeps cooling or plateaus again.