Barclays Research discusses its expectations for this week's US CPI print for the month of September on Thursday.
"After a robust September employment report, attention turns now to September CPI (Thu), where uncertainty remains high and risks in some components remain to the upside. We forecast headline CPI to have risen 0.2% m/m SA and 8.0% y/y on energy drag; core CPI likely rose 0.4% m/m and 6.5% y/y, supported by strong shelter inflation. The burden of proof for the CPI print is for it to surprise substantially to the downside and this is no trivial task: the market also expects core at 0.4%, which already incorporates some of the softness in indicators like used cars. On several occasions, actual CPI prints have outperformed bottoms-up estimates," Barclays notes.
"As long as labor market data are robust and/or CPI inflation prints high, we think the Fed will avoid disappointing market expectations and would keep financial conditions tight," Barclays adds.