• The US Consumer Price Index is forecast to rise 2.3% YoY in September, at a softer pace than August’s 2.5% increase.
• Annual core CPI inflation is expected to hold steady at 3.2%.
• The inflation report could ramp up USD volatility by altering the market expectation of the Fed outlook.

The Bureau of Labor Statistics (BLS) will publish the highly anticipated Consumer Price Index (CPI) inflation data from the United States (US) for September on Thursday at 12:30 GMT.

The US Dollar (USD) braces for intense volatility, as any surprises from the US inflation report could significantly impact the market’s pricing of the Federal Reserve (Fed) interest rate outlook for the rest of the year.

What to expect in the next CPI data report?

Inflation in the US, as measured by the CPI, is expected to increase at an annual rate of 2.3% in September, down from the 2.5% rise reported in August. The core CPI inflation, which excludes volatile food and energy prices, is forecast to stay unchanged at 3.2% in the same period.

Meanwhile, the CPI and the core CPI are anticipated to rise 0.1% and 0.2% on a monthly basis, respectively.

Previewing the September inflation report, “our forecasts for the September CPI report suggest core inflation lost modest momentum, registering a 0.24% m/m gain after advancing a slightly stronger 0.28% in August,” said TD Securities analysts in a weekly report, and added: