Markets
September's CPI Lands at 8:30 a.m. ET. Here's What the Market Expects
Economists expect headline inflation to rise to 3.6% from 3.4%, mostly on gasoline, with core inflation edging up to 2.5% from 2.4%. The 10-year Treasury yield goes into the report at 5.22% and the VIX at 15.27.
The Bureau of Labor Statistics publishes the September Consumer Price Index at 8:30 a.m. Eastern time on Wednesday, October 14. It is the last CPI report before the Federal Reserve's October 28 decision, and the first of three key releases this week: producer prices and retail sales follow on Thursday morning.
The consensus, based on Bloomberg and Reuters surveys of economists, is for headline prices to rise 0.6% in September and 3.6% from a year earlier, up from 3.4% in August. Most of that increase is expected to come from energy, and gasoline in particular, after oil's climb back above $100 a barrel. Core CPI, which excludes food and energy, is expected to rise 0.2% on the month and 2.5% on the year, from 2.4%. The Cleveland Fed's nowcast is close to that, at about 3.6% headline and 2.4% core.
Markets usually react to the gap between the actual figure and those expectations, and core is the number that matters most for the Fed. A 0.1-point surprise in monthly core CPI has often been enough to move Treasury yields, the dollar and stock futures within minutes. A headline beat driven only by gasoline is easier for the Fed to look through than a rise in services or shelter prices.
The starting point is a market that has already moved a lot. The 10-year Treasury yield closed at 5.22% on October 13, slightly below the 5.31% it reached on October 5. The VIX, Wall Street's volatility gauge, ended at 15.27, a calm reading for a week this packed. The S&P 500 is within 0.2% of its record, and the dollar index stands near 102.2.
Bank of America and Morgan Stanley report results before the open on the same morning. For a full timetable of the week's releases, with consensus figures and results as they come in, see our market events pages.