Institutions: US September headline CPI annual rate expected to accelerate to 3.7%, core CPI becomes key

Odaily News: Daniela Hathorn, Senior Market Analyst at Capital.com, stated that Wednesday's US CPI data is expected to show headline inflation accelerating to around 3.7% in September, reflecting the impact of rising energy prices, while core inflation is projected to be around 2.5%. The divergence between the two is particularly important for the Federal Reserve. The Fed hiked rates in September but now faces a difficult task: curbing inflation without putting unnecessary pressure on economic growth.

Markets are currently pricing in about an 80% probability that the Fed will hold steady in October. A softer core reading could reinforce this expectation and provide some relief to stocks and bonds; an upside surprise could push yields higher again, bringing renewed pressure on risk assets. (Jinshi)