CPI today: what a hot, in-line or soft report means for Fed rate odds

US consumer prices for September come out today, and the CPI today will decide less whether the Federal Reserve raises rates again than when. The Bureau of Labor Statistics publishes the report at 8:30 in Washington, 12:30 GMT, FRED’s release calendar shows. Futures already price a rise by December. The question is whether the figure pulls it forward to October or pushes it into next year.

The Fed raised its target range by a quarter point to 3.75–4.00% on 16 September, its statement says. Officials expected one more rise this year: the median of their projections that day put the federal funds rate at 4.1% at the end of 2026. Most of them still expected it when they met, as we reported on 8 October.

What markets expect from the CPI today

Futures give a rise at the Fed’s meeting on 28 October a 22% chance, and put the chance that rates are higher by 9 December at 87%, Central Bank Watch calculates from Tuesday’s prices. Across the next nine meetings they price 82bp of increases, about three more quarter-point rises.

There is no official forecast for CPI, but the Cleveland Fed publishes a daily model estimate built from oil and petrol prices and past inflation. Its nowcast for September, updated on Tuesday, is a rise of 0.53% in all prices and 0.20% in core prices, which leave out food and energy. That would lift annual inflation to 3.6%, from 3.4% in August, and leave core inflation at 2.4%.

The headline jump is mostly petrol. Regular petrol averaged $4.36 a gallon in September, 7% more than in August, the Energy Information Administration’s weekly survey shows, by our calculation. Markets expect that rise. Fed officials pay most attention to core prices, and so do traders.

Three outcomes for core CPI

Core prices rose 0.29% in August, and core inflation was 2.4%, its lowest since March 2021, BLS data on FRED show. Headline inflation was 3.4%, the unadjusted index shows. Core prices rose 0.22% in September 2025, so a monthly figure near that keeps the annual rate flat. By our calculation from the seasonally adjusted index:

Core CPI in September, on the month	Core CPI on a year earlier	Core CPI, last three months, annualised
0.1%	2.3%	2.4%
0.2% (the nowcast)	2.4%	2.9%
0.3%	2.5%	3.3%
0.4%	2.6%	3.7%

The last column matters. Core prices fell slightly in June, so the three-month rate to August was an annualised 2.0%. June drops out today. Even an in-line figure lifts the short-run rate to about 2.9%.

US core CPI, % change on the previous month, 2026. Source: US Bureau of Labor Statistics via FRED (CPILFESL), seasonally adjusted. September: Federal Reserve Bank of Cleveland nowcast, 13 October.

Jan	0.30
Feb	0.22
Mar	0.20
Apr	0.38
May	0.21
Jun	-0.02
Jul	0.22
Aug	0.29
Sep	0.20 (nowcast)

Source: US Bureau of Labor Statistics via FRED (CPILFESL), seasonally adjusted. September: Federal Reserve Bank of Cleveland nowcast, 13 October.The Macro Notebook

Hotter: core 0.3% or more. Two months in a row at that pace would undo the story of cooling core prices. The 22% chance of an October rise would likely climb, and a December rise would look close to certain. Watch the 2-year Treasury yield, which follows Fed expectations most closely. It closed at 4.79% on Tuesday, the Treasury’s daily curve shows, with the 10-year at 5.21%.

In line: core about 0.2%. Headline inflation rises to about 3.6% on petrol, which markets have seen coming, and core holds at 2.4%. Little in the pricing should change: October stays unlikely and December stays the central case.

Softer: core 0.1% or less. Core inflation would fall to 2.3%, and the case for any rise this year would weaken. There is a recent example of how fast that can move. On 30 September, when core PCE prices rose 0.2% in August against expectations of 0.3%, futures cut the chance of an October rise to about 35%, from 50% the day before, Yahoo Finance reported. A soft CPI could do the same to December.

Why one report may not settle it

The Fed’s target is PCE inflation, not CPI, and core PCE has run well above core CPI this year: 3.0% in the year to August, BEA data on FRED show, against 2.4%. A soft CPI does not bring that gap to the target. Officials will also weigh oil, which the nowcast expects to keep headline inflation near 3.6% in October.

What to watch

Date	Event	Why it matters
Wed 14 Oct, 12:30 GMT	CPI for September	Core above or below 0.2% moves the odds
Wed 28 Oct	Fed decision	Futures give a rise a 22% chance
Tue 10 Nov	CPI for October	The last CPI before the December meeting
Wed 9 Dec	Fed decision	Where futures put the next rise