Truflation estimates U.S. consumer prices rose 3.8% year-on-year in October, with energy costs tied to the Iran war keeping pressure on prices. The official inflation report is due Tuesday and could sway Federal Reserve rate expectations for December and 2027.
Truflation estimates U.S. consumer prices rose 3.8% year-on-year in October and 0.3% month-on-month. The alternative data provider points to ongoing upward pressure from elevated energy costs caused by the Iran war. The Labor Department's monthly consumer price index arrives on Tuesday.
Core gauge seen at 2.8%
Stripping out volatile items like food and fuel, Truflation's "core" gauge is seen at 2.8% year-on-year and 0.2% month-on-month. In September, official data showed headline growth of 3.7% year-on-year and 0.6% month-on-month, with the core gauge at 2.6% and 0.3%.
Truflation said: "Headline inflation is moderating, but upstream inflation pipeline remains active." The group also expects "uneven inflation" through the end of the year and early into 2027, with tariffs and input expenses lifting goods prices while stable services costs partially offset them.
Energy remains the swing factor
Truflation calls energy the "principal swing factor" for overall price gains. For October, it projected a 20.7% rise in energy prices versus a year earlier, with gasoline climbing 37.7%. Month-on-month, gas price growth is tipped to moderate to 0.3%.
Grocery prices, by contrast, are anticipated to fall because of retailer discounting and improving supplies.
Fed rate path hangs on the CPI print
The Tuesday report could sway projections for Fed interest rate policy in December and 2027. Solid labor market data last Friday bolstered the case that policymakers may believe they have the headroom to raise rates again next month, after officials delivered their first increase in three years in September.
According to CME FedWatch, traders now price in a roughly 79% chance of a quarter-point rate rise in December. Analysts at Vital Knowledge said investors are wondering whether that could be the last increase for a while, given that oil prices may slide if the U.S. and Iran reach a detente.
Truflation also noted that it cannot calculate a direct year-over-year comparison, because the Bureau of Labor Statistics did not release the October 2025 index during a federal government shutdown. Its prediction carries the September 2025 level into October 2025, assuming no monthly change.
Source: Investing.com
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