Capital.com senior market analyst Daniela Hassoun says Wednesday’s US CPI is
expected to show September headline inflation accelerating to about 3.7% YoY,
driven by higher energy, while core CPI is seen near 2.5% YoY. The divergence
matters for the Fed, which hiked in September and now faces the task of reducing
inflation without unduly slowing growth; markets price roughly an 80% chance of
a Fed hold in October. A softer-than-expected core print could reinforce the
pause and relieve stocks and bonds; a stronger core print could push yields
higher and weigh on risk assets.
