US September CPI is expected to rise to 3.7%, with core inflation estimated at 2.5%.

Capital.com Senior Market Analyst Daniela Hathorn stated that Wednesday’s U.S. CPI data is expected to show overall inflation accelerating to around 3.7% in September, reflecting the impact of rising energy prices, while core inflation is expected to be around 2.5%. The difference between the two is especially important for the Federal Reserve. The Fed raised interest rates in September, but now faces a tough task: to curb inflation without placing unnecessary pressure on economic growth. The market currently prices the probability of the Fed holding rates steady in October at about 80%. If the core data is softer, it may reinforce this expectation and provide some relief for stocks and bonds; if it exceeds expectations, it could push yields higher again and bring new pressure to risk assets.