U.S. September CPI will be released tonight: Rising inflation expectations may prompt the Federal Reserve to resume interest rate hikes

The U.S. Bureau of Labor Statistics will release the September CPI data tonight at 20:30. The agency expects the overall CPI year-on-year increase to rise from 3.4% in August to 3.6%, with a month-on-month increase of 0.6%, marking the largest increase in nearly five months, primarily driven by a rebound in energy prices. The core CPI is expected to increase by 2.5% year-on-year and 0.2% month-on-month, lower than the previous value of 0.3%.

This CPI report is the last inflation report before the Federal Reserve's interest rate meeting on October 27-28. CME data shows that the market currently expects a roughly 17% probability of a rate hike by the Federal Reserve in October. If the core CPI month-on-month increase reaches 0.3%, it may reinforce expectations for a rate hike this month; if it meets the expectation of 0.2%, the Federal Reserve may pause action and delay the rate hike decision until December. Additionally, the U.S. will release PPI data on Thursday, and both CPI and PPI will influence the market's judgment on the subsequent inflation trend and the Federal Reserve's policy path.