Everyone is waiting for Friday’s big inflation report. Here’s what to expect
A customer looks at items at a grocery store in West Milton, Ohio, United States, on Tuesday, October 21, 2025.
Kyle Grillot | Bloomberg | Getty Images
The release of September’s consumer price index report on Friday is Wall Street’s only data-hungry play this month, raising the possibility that it will be a market-moving event.
While actual figures are expected to reach the levels of recent months, the scarcity of official economic reports due to the government shutdown means that even the slightest deviation could have a huge impact.
“Since we haven’t received any government data in the recent past, I think all of the market’s focus and attention will be directed towards this single report,” said Troy Ludtka, senior U.S. economist at SMBC Nikko Securities. “This will be the report to end all reports.”
But the consensus on Wall Street seems to be that the Bureau of Labor Statistics’ CPI statement is the same.
Economists surveyed by Dow Jones expect the monthly reading for all items to rise 0.4%, the same as a month ago, giving the 12-month inflation rate 3.1%, or 0.2 percentage points higher than the August level. Core CPI, excluding food and energy, is expected to increase by 0.3% monthly and 3.1% annually, as in August. The annual rate will be the highest since January.
What the Street will be looking for will be any deviations in the readings that suggest inflation is hotter or colder than expected. The focus will also be on details showing the impact of President Donald Trump’s tariffs on prices.
The report, expected to be published on October 15, will be the last major economic readout before the Fed’s policy meeting, which ends Wednesday. The BLS recalled workers because Social Security used the CPI as a reference for cost-of-living adjustments.
lack of clarity
Goldman Sachs economists expect little change in auto prices, an increase in auto insurance and a decrease in airline tickets. On the tariff issue, the firm said in a note that it expects “increased pressure” in categories such as communications, household goods and recreation, but only a 0.07 percentage point increase to the core inflation figure.
However, the data is generally a black box that much of the government has shut down, raising some questions about the reliability of the CPI.
“We don’t have complete clarity due to the lack of key data points the market depends on due to the government shutdown,” said Vishal Khanduja, head of broad fixed income markets at Morgan Stanley Investment Management. “This adds a little more uncertainty.”
Indeed, investors have been on edge lately and Despite continued volatility in daily movements, major stock market averages are around record territory.
Geopolitical uncertainty underlies the concerns; The ever-changing tariff environment is raising concerns that higher prices could slow the otherwise surprisingly strong pace of economic growth. Despite concerns about how clean the data will be due to shutdown-related disruptions, the CPI report will help answer at least some of those questions.
That’s true for both markets and the Federal Reserve, which holds a policy meeting next week where officials are expected to approve another quarter-point rate cut.
“In terms of market impact, it would require a meaningful surprise to the upside for the market to change its mind on additional rate cuts,” said Julien Lafargue, chief market strategist at Barclays Private Bank.
Apart from the frequent volatility of the trade war, markets were supported by another strong earnings season. Before the lockdown, economic data had also shown a surprisingly resilient economy. gross domestic product tracking It’s closer to 4% for the third quarter, according to the Atlanta Fed.
While something significant will need to be done to shake up this narrative, a surprise from the CPI could be just the ticket.
“If the number turns out to be higher than expected, I would expect volatility,” said Stephanie Link, chief investment strategist at Hightower Advisors. “I see this as a buying opportunity as the economy is strong, the Fed has begun a rate-cutting cycle, EPS is showing double-digit growth, and the fourth quarter is seasonally the strongest quarter of the year.”
