Gasoline fuels inflation, but Fed policy seen steady WASHINGTON (Reuters) - U.S. consumer prices rose in September as the cost of gasoline surged, posing a threat to consumers' spending power although inflation pressures look unlikely to derail the Federal Reserve's ultra-easy policy path. The Consumer Price Index increased 0.6 percent last month, in line with analysts' expectations and matching August's reading, data from the Labor Department showed on Tuesday. Most of the increase in consumer prices was due to a sharp rise in gasoline prices, which jumped 7 percent in September after climbing 9 percent the prior month. Higher costs at the pump force many American consumers to cut back on other spending. A measure of underlying inflation, however, was relatively muted. The core CPI, which excludes food and energy prices, increased just 0.1 percent for a third month in a row. "This confirms that inflation remains in check," said Adam Sarhan, chief executive of Sarhan Capital in New York. In the 12 months to September overall consumer prices increased 2 percent, the fastest pace since April and up from 1.7 percent in August. Core prices also rose 2 percent in the year through September, up a tenth of a point from August's reading. U.S. stock index futures were trading higher after the data as strong earnings from key companies soothed fears about the global economy, while yields on Treasury debt rose. Crude oil and gasoline prices rose over the summer as the United States and its allies raised pressure on Iran over its nuclear program. They have increased sanctions aimed at Tehran's oil industry, helping to keep world oil prices high. On Tuesday, European Union governments imposed sanctions against major Iranian state companies in the oil and gas industry, and strengthened restrictions on the central bank. While most economists don't see inflation threatening the U.S. economy, some believe the Fed would tolerate prices rising faster than the central bank's 2 percent target over the shorter term to allow faster economic growth as the country recovers from the 2007-09 recession. Allowing this view to blossom, the Fed said in September it would keep interest rates low for a long time even after the economy strengthens. "Core inflation was low and unthreatening (in September), but in truth neither matters to a Fed monetary policy committed to lowering unemployment," said Joseph Trevisani, a market strategist at Worldwide Markets in Woodcliff Lake, New Jersey. The Fed targets a separate measure of inflation calculated by the Commerce Department which tends to run cooler than the consumer price index. That measure, called the personal consumption expenditures index, rose 1.5 percent in the 12 months through August, according to a September 28 report. Last month, food prices rose just 0.1 percent despite a severe drought that has afflicted America's agricultural heartland. Away from gasoline and food, the cost of apparel advanced 0.3 percent. New motor vehicle prices fell 0.1 percent and used cars and trucks dropped 1.4 percent. Housing costs edged up, with owners' equivalent rent rising 0.2 percent. Additional reporting by Ryan Vlastelica in New York; Editing by Andrea Ricci