Market Volatility Expected As CPI Report Hits Screens

Markets will turn their attention to US inflation data today as a delayed consumer price index (CPI) report takes center stage, overshadowing key policy decisions from the Bank of England (BOE) and the European Central Bank (ECB).

After weeks of uncertainty, investors will finally receive an update on US inflation. However, the report will come with significant caveats. A recent government shutdown disrupted data collection, leaving the Bureau of Labor Statistics (BLS) unable to compile a full and conventional CPI release.

The CPI report will likely provide only November price levels, rather than a complete month-by-month breakdown that includes October. During the shutdown, BLS staff could not conduct in-person or phone-based price surveys, which normally account for the majority of CPI data. As a result, October inflation figures remain largely unavailable.

That said, roughly 20% of the CPI basket relies on alternative sources such as online pricing and private data providers. The BLS may include some of this information in today’s release, though the agency has not clarified how it will present the data.

Market Volatility Expected As CPI Report Hits Screens

Morgan Stanley expects the BLS to publish only a November price level, noting that individual monthly changes may not appear at all. This approach would force market participants to infer trends by comparing November data directly with September, leaving October as a missing link.

Despite the data limitations, analysts broadly agree on the underlying inflation narrative. Core goods inflation should edge higher toward year-end as tariffs continue to feed through supply chains. At the same time, seasonal factors—particularly Black Friday discounts—could cap overall price pressures and introduce a downside bias to November figures.

Taken together, these forces suggest inflation will continue to moderate modestly rather than reaccelerate. That message, rather than any precise monthly detail, will likely shape the market’s interpretation of the report.

Traders may react sharply when the CPI numbers first cross the wires, especially given the lack of other major US data releases today. However, the questionable quality and incomplete nature of the data should limit the report’s lasting impact on Federal Reserve expectations.

In contrast, today’s central bank decisions appear largely priced in. Markets expect the BOE to deliver a rate cut and anticipate no policy change from the ECB, reducing the potential for surprise. That dynamic places the US CPI report at the forefront of near-term volatility.

Still, many investors may fade any outsized moves once the initial reaction passes. With the next Fed rate cut not priced in until June next year, markets have little incentive to reprice the policy outlook aggressively based on partial and unreliable data.

Unless inflation delivers a major and unexpected shock, today’s CPI release is likely to generate only temporary turbulence—another unusual data point in an already unconventional reporting period.

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