U.S. inflation seen at 3.7% as Fed's next move hinges on the data
The United States releases September consumer prices on Wednesday. After the Fed's first rate hike in three years, the figures are seen as pivotal.
Archive image · Photo: Federalreserve / Wikimedia Commons, Public domain (cropped and resized)
The United States publishes September consumer price data on Wednesday at 8:30 a.m. ET. Economists expect annual inflation of 3.7% and core inflation, excluding food and energy, of 2.5%, according to a market update by broker Charles Schwab. Bank of America economists expect headline inflation to come in higher than in August, while the core rate could moderate, Kiplinger reported.
The data matter for the Federal Reserve, which according to Schwab recently raised interest rates for the first time in three years. "CPI and PPI are key to whether rate hike odds shift," said Liz Ann Sonders of the Schwab Center for Financial Research. Fed Governor Christopher Waller said higher yields, according to Bloomberg, are already curbing demand in rate-sensitive sectors. The 10-year Treasury yield stood at 5.19%.
The strain is most visible in housing: the average 30-year mortgage rate reached 7.4%, according to Freddie Mac, the highest since November 2023. The Fed releases its Beige Book economic report later on Wednesday. Producer prices and retail sales follow on Thursday, when Fed Chair Kevin Warsh is also scheduled to speak.