Credit Agricole on US CPI
We expect US headline CPI to come out at 0.29% MoM SA in October. We cannot provide a YoY number, as the October 2025 index was never published by the BLS, courtesy of last year's government shutdown. There is no YoY consensus either of course. The US fixings market - using an arbitrary level of 325.604pt for the index in October 2025 - has a YoY mark of 3.56% for October 2026. With this same reference, we are 2bp above the market. If our forecast is on track, the October CPI report would represent an improvement compared to September, though would still be firmer than is ideal for the Fed even in terms of core inflation. The larger-than-expected downward revisions due to the recent PCE methodology changes likely helped buy the Fed some time to stay on hold in October. We continue to expect another 25bp hike in December, followed by a final 25bp hike in March as the Fed delivers 75bp of hikes in total to reverse last year’s insurance cuts, at an every-other-meeting pace, before another pause. We see recent Fedspeak as supportive of this view, with several Fed speakers advocating some additional tightening, but at a gradual pace.
We expect US headline CPI to come out at 0.29% MoM SA in October. We cannot provide a YoY number, as the October 2025 index was never published by the BLS, courtesy of last year's government shutdown. There is no YoY consensus either of course. The US fixings market - using an arbitrary level of 325.604pt for the index in October 2025 - has a YoY mark of 3.56% for October 2026.
With this same reference, we are 2bp above the market. If our forecast is on track, the October CPI report would represent an improvement compared to September, though would still be firmer than is ideal for the Fed even in terms of core inflation. The larger-than-expected downward revisions due to the recent PCE methodology changes likely helped buy the Fed some time to stay on hold in October. We continue to expect another 25bp hike in December, followed by a final 25bp hike in March as the Fed delivers 75bp of hikes in total to reverse last year’s insurance cuts, at an every-other-meeting pace, before another pause.
We see recent Fedspeak as supportive of this view, with several Fed speakers advocating some additional tightening, but at a gradual pace.