Investors Brace for US and UK Inflation Data as Markets Await Direction
After weeks of uncertainty caused by the U.S. government shutdown, investors will finally get a clearer picture of how the Trump administration’s trade war has filtered through to consumer prices. The US inflation data for September — delayed since last week — is now set for release on Friday, October 24.
The report, which the Federal Reserve has prioritized despite limited staffing, will provide crucial insight into the health of the world’s largest economy ahead of the October 28–29 FOMC meeting. Economists expect headline inflation to rise to 3.1% from 2.9%, with the core rate holding steady at 3.1%, according to Reuters.
Investors “Flying Blind” as Delays Cloud Outlook
The prolonged delay has left traders “flying blind,” relying on private-sector data and the Fed’s Beige Book for signals on inflation and employment trends. Market participants remain cautious about placing large directional bets until the CPI data arrives.
The release will be pivotal for the Fed’s next move. Futures markets now fully price in a 0.25% rate cut this month and assign a roughly 70% probability to another reduction in December.
The central bank’s most recent projections indicated a year-end inflation rate of 3%, suggesting that price pressures — while moderating — remain above target. A stronger-than-expected CPI print could complicate the Fed’s shift toward supporting the labor market and reignite concerns over tariff-driven price spikes.
UK Inflation in Focus as Bank of England Balances Risks
Across the Atlantic, investors are also bracing for the latest UK inflation data, which is expected to test the Bank of England’s resolve to begin cutting rates. Economists expect headline CPI to rise to 4% in September, up from 3.8% in August — matching the BoE’s own forecasts and marking the fastest pace since late 2023.
The anticipated uptick is driven by higher fuel and airfare costs, along with seasonal increases in clothing prices. Analysts also point to lingering effects from the new VAT rules on private school fees implemented in January.
The IMF recently warned that the UK is on track to post the highest inflation rate in the G7 this year and next. Still, a slowdown in global food prices could bring some relief in the months ahead.
What It Means for Traders
For short-term traders, the combination of delayed U.S. data and sticky UK inflation suggests a period of heightened volatility. A hotter U.S. CPI could boost the dollar and pressure equities, while a softer print may reinforce bets on two additional Fed cuts this year.
In the UK, a stronger CPI could weigh on Gilts and support sterling temporarily — though the broader trajectory still favors lower yields and easing by early 2026. Expect rate-sensitive sectors like housing, banks, and consumer goods to react sharply to this week’s inflation readings.
The bottom line: With the US inflation data delayed and central banks entering a new easing phase, every number matters. The next few days could set the tone for the rest of Q4 — and shape how traders position into year-end.