• Economists expect September headline CPI to rise 0.6% month-over-month, driven by a 7.1% jump in gasoline prices, while core CPI is forecast to slow to 0.2%.
  • The report, due at 8:30 a.m. ET, will be scrutinized for signs that energy-driven inflation is broadening, with markets pricing a 22% chance of another Fed rate hike this month.
  • Annual headline inflation is seen accelerating to 3.6%, but core annual inflation is expected to edge up to 2.5%.

Gasoline to Drive Headline Surge, Core to Slow

At 8:30 a.m. ET today, the Bureau of Labor Statistics will release September’s consumer price index, a report that could shape the Federal Reserve’s next move. Economists surveyed by Reuters (TRI) expect headline CPI to rise 0.6% month-over-month, a sharp acceleration from August’s 0.4% gain, driven primarily by a 7.1% surge in gasoline prices, according to Energy Information Administration data. That alone could add roughly 0.3 percentage point to the monthly headline figure—about half the expected increase.

Core CPI, which strips out volatile food and energy costs, is seen rising just 0.2%, down from 0.3% in August. Year-over-year, headline inflation is forecast to jump to 3.6% from 3.4%, while core annual inflation is expected to tick up to 2.5% from 2.4%. The divergence underscores a familiar dynamic: energy shocks can lift the headline number even as underlying price pressures moderate.

Goldman Sachs (GS) projects a slightly higher headline reading of 0.59% and core at 0.24%, with annual headline at 3.7%. But these are estimates, and the actual figures could surprise.

“The key question is whether the energy shock is spilling over into broader prices,” said Scott Anderson, chief U.S. economist at BMO Capital Markets (BMO). “A core reading around 0.2% would likely be enough for the Fed to hold in October, but it won’t settle the debate on whether more hikes are needed.”

The Fed raised its benchmark rate by a quarter point in September to 3.75%–4.00%, its first increase in three years. Markets currently assign roughly a 22% probability to another hike at the October 27–28 meeting, according to CME Group (CME) data. With annual core PCE inflation—the Fed’s preferred gauge—running at 3.0% in August, well above the 2% target, policymakers remain wary of persistent price pressures.

Ahead of the report, Treasury yields edged lower, with the 10-year note yielding around 5.20%, while Brent crude traded near $106.52 a barrel. Analysts said an upside surprise could lift short-term yields and the dollar, while a downside surprise might temper expectations for further tightening.

The political backdrop adds intrigue. Rising living costs are a top issue ahead of the November 3 midterm elections. A Reuters/Ipsos (IPS.PA) poll found that 78% of Americans blame President Trump’s policies, including tariffs and the conflict with Iran, for higher prices. The administration has pointed to global energy markets as the primary driver.

For households, the report will be a mixed bag. Lower-income families continue to feel the pinch of expensive gasoline and food, even as core inflation cools. Retirees are watching the CPI-W index, which determines the 2027 Social Security cost-of-living adjustment. The Senior Citizens League projects a 3.5% increase, up from 2.8% for 2026, though that is not yet official.

Businesses, particularly in transportation, face higher fuel costs that could eventually feed into consumer prices. “The risk is that elevated diesel and jet fuel costs start to push up supermarket prices,” said Sung Won Sohn, an economist at Loyola Marymount University. “That’s the channel we’re watching.”

On Thursday, producer price inflation and retail sales data will provide further clues on cost pressures and consumer demand. New York Fed President John Williams said Tuesday that another quarter-point hike might be needed this year, but he saw no reason for more than that.

The September CPI report will be released at 8:30 a.m. ET. As of 8:26 a.m. ET, the data had not yet been published. Markets remain on edge, with the core reading likely to carry more weight for policy than the gasoline-driven headline.

Correction: An earlier version of this article misstated the August core CPI month-over-month change. It was 0.3%, not 0.2%.