With official September CPI data delayed by the shutdown, investors are trading on forecasts and instinct.
Inflation has cooled from its pandemic highs, but shelter, tariffs, and consumer expectations are keeping it sticky.
Here’s where the data stands—and where it could go next.
Current Inflation Snapshot
The most recent official figure (August 2025) shows 2.9% headline inflation and 3.1% core. Forecasts peg September at roughly 3.0–3.1%, signaling steady but stubborn price pressure.
Data Delays Cloud the Picture
The Bureau of Labor Statistics postponed its CPI release to October 24, leaving the Fed and markets to rely on models like the Cleveland Fed’s now-cast (~2.97%). Economists are flying partly blind.
What’s Driving Prices
Shelter inflation remains the main culprit, up 3.6% year-over-year. Food prices hover near 3.2%, while energy costs are stabilizing. Tariffs on imports are adding fresh pressure to goods categories.
Public Frustration Grows
A Guardian poll found 75% of Americans say they’re still seeing higher prices, despite political claims that inflation is “over.” Price fatigue is real, and voters are noticing.
Market Outlook
Most analysts expect the Fed to stay cautious: no immediate cuts until inflation drops nearer 2.5%. Futures pricing reflects moderate confidence in a spring 2026 rate cut window—if inflation cooperates.
Bank Forecast Consensus
- Goldman Sachs: 3.0% headline, 3.1% core.
- Bank of America: 3.1% headline, modest monthly gain.
- Citigroup: 2.9–3.0%, predicting near-flat momentum through winter.
- Markets view these forecasts as a sign of stability—but not victory.
Risks to Watch
- Upside: new tariffs, persistent shelter inflation, global supply issues.
- Downside: slowing wage growth, weaker demand, and disinflation in services.
- Either way, volatility returns once official data lands.
Consumer Expectations
Inflation expectations ticked up to 3.4% in September. If that trend sticks, it could anchor inflation above the Fed’s target longer than policymakers want.
Economic Impact
Real wages remain under pressure. Even at 3%, inflation erodes household spending power, especially among fixed-income earners. Businesses are tightening costs to protect margins.
Prediction
Barring a surprise surge, expect headline inflation to hover near 3% through year-end. If the October 24 release shows higher numbers, markets could turn defensive fast.
Base case: sticky, stable, and still too high for the Fed’s comfort.
