#美国9月CPI即将公布 CPI arrives at 20:30 tonight: Williams says “another rate hike may come this year,” with the gap between headline and core inflation the deciding factor

The US September CPI will be released at 20:30 tonight (Beijing time), marking the most important inflation data point ahead of the Fed’s October 27-28 policy meeting and the final weight on the decision scale before Chair Warsh enters the blackout period. The market expects headline inflation to jump to around 3.6% alongside oil prices, while core inflation is expected to remain moderate—the way this “gap” appears will directly determine the direction of the December rate-hike scenario. New York Fed President Williams’ Tuesday remark that “another rate hike may come this year” has already set a hawkish tone.

What to watch tonight: headline inflation jumps, core inflation stays subdued!
First, the expectations. According to a survey of economists by Bloomberg cited by Tencent Finance, the market expects US headline CPI to rise 0.6% month-on-month in September, significantly above the previous month’s 0.4%, with the year-on-year increase potentially reaching 3.6%, above August’s 3.4%—the main driver being the surge in oil prices following the earlier Middle East conflict. Core CPI, excluding food and energy, is expected to rise 0.2% month-on-month, below the previous reading of 0.3%, with the year-on-year increase at around 2.5%.
The analysis compiled by prominent macro reporter Timiraos also confirms this pattern: major banks broadly expect September inflation to rise significantly alongside oil prices, while core inflation remains moderate.
For the Fed, this “gap” is highly significant: if the jump in headline inflation mainly comes from the energy component, it would constitute “a continuation of a known shock” and have limited policy implications; but if core inflation also rises, it would indicate that energy costs are spreading into areas such as transportation and food, meaning the fight to suppress inflation is far from over.
Molly Brooks, a US rates strategist at TD Securities, previously pointed out that the risks surrounding this CPI report are asymmetric—data above expectations could mean the Fed needs to accelerate the pace of tightening, while data in line with or below expectations would support the Fed remaining cautious in subsequent decisions.
Looking at the latest inflation readings: August PCE rose 3.4% year-on-year and core PCE 3.0% (released September 30), while September nonfarm payrolls increased by just 29,000 and the unemployment rate was 4.2% (released October 2). Employment has cooled significantly while inflation has diverged by component—this “data clash” is precisely why suspense surrounding the October meeting has persisted until now.

Williams signals another hike this year, pause in 2027
On the eve of the CPI release, Williams, the Fed’s “number three” and president of the New York Fed, said clearly in an interview Tuesday: “I continue to hold my original view that one more rate hike is appropriate. At this point, I don’t see any reason to believe that we need to do more after that.”
According to the Securities Times, he expects inflation to fall “quite noticeably” next year and approach the 2% target, while explaining that higher energy prices driven by the Middle East conflict and demand from AI infrastructure construction were the main reasons he “firmly supported” the September rate-hike decision.
On the same day, Boston Fed President Collins said in a speech prepared for a banking conference that she expected “a modest further rate hike would be appropriate” before the end of this year, with the specific timing depending on subsequent data such as CPI and PCE. The two officials’ successive remarks effectively established a baseline scenario for the market before the blackout period.
According to CME FedWatch data as of Tuesday, the probability of rates remaining unchanged at the October meeting was around 77.3%, while the probability of a 25-basis-point hike was around 22.7%; the probability of a cumulative 25-basis-point hike in December was around 68.7%, while that of a cumulative 50-basis-point hike was around 19.1%. In other words: October will likely see no action, while December is the main battleground.
Interestingly, the market reaction was notable: long-term US Treasury yields fell rather than rose after Williams’ remarks. According to Wallstreetcn, the 10-year US Treasury yield fell by around 2.5 basis points Tuesday to around 5.21%, briefly dropping below 5.17% intraday.
Bank of America strategist Hartnett even offered a counterintuitive view: if the Fed proactively raises rates in October, it may not be negative for the market and could instead help stabilize long-term yields and support risk assets—the market’s core pressure currently is not short-term rates, but the tightening of financial conditions caused by persistently rising long-term yields.

The final week before the blackout period: two ways to write the script!
After tonight’s CPI release, Fed officials will have one final window to speak: Governor Waller and Cleveland Fed President Hammack will also speak this week, while Chair Warsh will deliver remarks during the IMF annual meeting in Bangkok, Thailand; starting this Saturday, the Fed will enter its routine policy communications blackout period, which will last until the October 27-28 meeting concludes.
The subsequent script will broadly take one of two forms:
First, headline inflation jumps as expected while core inflation remains moderate, allowing the “energy disturbance” narrative to prevail and largely locking in the path of no action in October followed by a 25-basis-point hike in December;
Second, core inflation rises unexpectedly, reigniting tightening expectations. Not only would the probability of a December hike increase, but market pricing for the 2027 rate path would also change accordingly—futures markets currently broadly bet that rates in 2027 will be significantly higher than their current level, while Williams is precisely “going against” market expectations on this point. At 20:30 tonight, the answer will be revealed. #WCTCS9