US CPI Data Release: September 2025 Figures (Released October 24, 2025)

The Bureau of Labor Statistics released September 2025 CPI data today amid a federal government shutdown, prioritizing it for Social Security cost-of-living adjustments (COLA) for 2026. Headline CPI rose 0.3% month-over-month (m/m) and 3.0% year-over-year (y/y), below consensus forecasts of 0.3% m/m and 3.1% y/y. Core CPI (ex-food and energy) increased 0.2% m/m and 3.0% y/y, also softer than expected (0.3% m/m, 3.1% y/y). Shelter costs (33% CPI weight) eased to +0.2% m/m, while energy prices ticked up modestly due to refinery disruptions; tariff passthrough added ~0.07pp to core but showed substitution effects limiting impact.

Short-Term Market Effects

Equities: S&P 500 and Nasdaq futures advanced 0.3-0.5% post-release, extending near-record highs, as subdued inflation reinforced growth narratives amid resilient Q3 GDP (~4%). Rate-sensitive sectors (tech, consumer discretionary) led gains; however, volatility may rise if October data (likely unreleasable due to shutdown) delays Fed signals.

Fixed Income: 10-year Treasury yield dipped ~2bps to 4.15%, reflecting eased hawkish repricing. This supports expectations of a 25bps Fed cut at the October 29-30 FOMC (98% probability via CME FedWatch), with another in December (96% odds), balancing 3% inflation against softening labor data.

FX & Commodities: USD weakened 0.2% vs. majors (EUR/USD +0.3%), boosting EM currencies. Oil (WTI) held flat at $72/bbl despite gasoline uptick, but broader commodities face headwinds from potential tariff escalation.

Policy & Broader Implications

The print tempers upside inflation risks from tariffs/geopolitics, keeping the Fed on a gradual easing path toward 2% target (last below in Feb 2021). Shutdown-induced data gaps (e.g., no October CPI) heighten uncertainty, potentially amplifying market reactions to proxies like nowcasts. For investors, prioritize diversified, quality assets; short-term positioning favors duration extension and cyclical overweight. Risks: Upside surprises in November PCE could delay cuts, #cpi