The headline consumer price index is forecast to climb 0.6% in September and 3.6% compared with last year, pushing further away from the Fed's 2% goal. Core inflation is seen advancing 0.2% from August and 2.5% over 12 months. That monthly core pace would be a touch cooler than the prior month, while the annual core rate would tick higher.
Joe Brusuelas, chief economist at RSM, the tax firm, said oil-sensitive categories might push the headline reading above projections. "We've got real upside risk on the September CPI," he said. "Typically, when we have these moves in inflation, everyone's models undershoot the actual outcome."
Ever since the U.S. war with Iran kicked off earlier this year, energy prices have been a primary force pushing inflation higher. To support global oil flows, President Donald Trump last week announced a loosening of diesel restrictions on Russia, though analysts don't expect it to meaningfully lower prices.
Energy costs are doing most of the work in recent inflation prints. Market Briefs covers that breakdown free every morning.
The global benchmark Brent crude rose more than 14% in September, lifting its third-quarter gain to about 42%. On Tuesday, Brent changed hands around $105 a barrel. According to Robert Sockin, PGIM's chief U.S. economist at the asset manager, if oil stays firm it could spill into prices beyond energy.
In that case, it would be tougher for the Fed to dismiss the surge as a brief shock that would not require higher rates. "The list of reasons to hike rates in our view is long," Sockin said. "Ultimately, we have low confidence in the timing of the Fed's next move, but more conviction on the direction of travel."
The Federal Reserve delivered its first rate increase in three years last month and, per the meeting minutes, signaled it will likely have to hike again. CME's FedWatch tool shows futures traders betting the next hike arrives at the December policy meeting. Wednesday's CPI report is the last one before November's midterm elections and could influence whether the Republican party retains full control in Washington.
Economic confidence has slipped this year across party lines, University of Michigan data shows. Since the start of 2026, Republicans and independents have seen steeper declines in sentiment than Democrats.
Economists look for Thursday's producer price index to increase 0.6% between August and September and 5.5% over the past year, a modest pickup from August's pace. For your wallet, the through-line is simple enough: if oil stays sticky, inflation pressure sticks around, the Fed stays on alert, and the vibe into November stays tense.
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