Delayed September CPI after shutdown could shape Fed policy path

The U.S. Bureau of Labor Statistics will publish the delayed September Consumer Price Index at 8:30 a.m. Eastern on Friday, the first major economic release since the federal government shut down on October 1, and markets say the reading could shape the Federal Reserve's policy path ahead of its October 29 meeting. Economists widely expect headline inflation to rise about 3.1 percent year over year, and with most other data frozen by the shutdown, the CPI will be the primary fresh gauge of price pressures available to policymakers and investors this week.

The report was completed after the Bureau recalled a limited number of staff to finalize figures needed to calculate next year’s Social Security cost of living adjustment, preventing a delay to benefit updates. With job and payroll releases on hold, traders and strategists say the CPI will carry outsized weight in the absence of other inputs, leaving markets more sensitive to any surprise in the print.

Consensus forecasts point to a monthly uptick roughly in line with recent readings, and several analysts expect a modest or muted market reaction if the data meets expectations. "If U.S. inflation meets expectations with minor...