All eyes on CPI report after weeks of economic data blackout

[CPI Consumer price index is shown as financial concept with Shopping cart]
Andrii Dodonov

Investors will finally get some official economic data from the government, with the Consumer Price Index report due for release this morning, even as the federal shutdown has dragged on for more than three weeks.

Economists largely expect persistent retail inflation in September, increasing at the same pace as the month before.

Headline CPI in September is seen rising 0.4% M/M, same as the prior month. On a Y/Y basis, CPI is expected to rise 3.1%, compared with +2.9% in August.

Core CPI, which excludes food and energy prices, is projected to rise 0.3% M/M in September and 3.1% Y/Y - the same increases seen in August.

The CPI report was scheduled for Oct. 15, but the Bureau of Labor Statistics pushed it to Oct. 24 due to the government shutdown. The report is legally required for calculating Social Security cost-of-living adjustments for next year.

The data will be the last significant economic reading before the Federal Reserve's monetary policy meeting next week, where the central bank is widely expected to cut its key interest rate by 25 basis points to 3.75%-4.00%.

"Tariffs may start to become a little more obvious [https://seekingalpha.com/article/4832908-rates-spark-stuff-perking-interest-as-we-end-week], but given the Fed's primary worry right now is a cooling in the jobs market, this won't block a 25bp rate cut later this month," ING Economic and Financial Analysis said.

"Even if CPI were to surprise hot, the Fed is unlikely to skip its upcoming rate cut," MUFG analysts projected. "… if the CPI print were to land above or below the range of forecasters' expectations, we believe that the risks are skewed towards a larger selloff in short-term forward rates, which could reprice out some cuts in 2026."

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