CPI Without a Pulse: Markets Brace for a Noisy Inflation Print That Could Whipsaw Rates and Stocks

The November Consumer Price Index (CPI) report arrives Thursday morning at 8:30am ET, but investors should be prepared for a release that is anything but straightforward. The report will be published without a corresponding October CPI print due to the government shutdown, meaning markets will be forced to interpret inflation trends using year-over-year figures and imperfect two-month changes rather than the usual month-to-month comparisons. That unusual setup raises the risk of noisy headlines, exaggerated knee-jerk reactions, and ultimately a “fade-the-move” market response.

Economist expectations are clustered tightly, though there is notable disagreement beneath the surface. Consensus expectations call for headline CPI to rise roughly 3.0%–3.1% year over year, compared with 3.0% in September, while core CPI (excluding food and energy) is expected to land around 3.0%–3.2% year over year. On a normal release, traders would focus on the month-over-month print, but with October missing entirely, that data point will not be published. Instead, analysts are effectively estimating the combined inflation change from September through November, which most banks peg at an average monthly core pace of about 0.24%.

Citi, for example, expects both headline and core CPI to come in softer at 2.8% year over year, arguing that inflation pressures across services continue to ease and that goods prices may be temporarily distorted lower by data collection issues during the shutdown. Their internal math implies a cumulative 0.37% increase in core CPI from September to November, or just 0.18% per month on average—well below levels that would alarm the Federal Reserve. Other forecasters are less forgiving, warning that a 3.2% core CPI print would look “hot” on the surface, even if the underlying trend is moderating.

The government shutdown complicates interpretation significantly. Roughly two-thirds of CPI prices are normally collected in person by Bureau of Labor Statistics (BLS) staff, which was impossible for most of October. As a result, the BLS has confirmed it will not publish aggregate headline or core CPI figures for October at all. A limited number of sub-indices that rely on online pricing or third-party data—such as gasoline, new and used vehicles, and possibly prescription drugs—may still appear, but the coverage will be partial and uneven. November’s CPI will therefore reflect a mix of delayed pricing, imputed data, and a two-month lookback, making precision difficult.

Goods inflation is one of the key areas analysts are watching most closely. Core goods prices have recently been pressured higher by tariffs, but easing vehicle inflation—particularly in used cars—could offset some of that. Analysts expect used vehicle prices to rise modestly on a two-month basis after declining in September, while apparel prices are expected to cool following two unusually strong months. One wildcard here is data quality: lower collection rates and Black Friday discounting may artificially depress some goods categories, setting the stage for a rebound in December.

Services inflation remains the more important driver of the underlying trend, and here the signal is cautiously encouraging. Shelter inflation, particularly owners’ equivalent rent (OER), continues to decelerate and is expected to push to a cycle low near 3.6% year over year. Travel-related services such as airfares and lodging away from home are also expected to soften, supported by weaker hotel occupancy data and slowing passenger volumes. Offsetting that, medical services inflation is expected to rebound after prior weakness, and vehicle insurance remains a modest upside risk after an unusually soft September reading.

Energy and food are expected to be relatively benign in this report. Gasoline prices suggest energy inflation will be modest, while food price growth is expected to cool as agricultural commodity prices have eased. Any tariff rollbacks affecting food prices will likely not be visible until later reports.

For markets, the stakes are high but the signal may be muddled. Fed funds futures currently imply that the next rate cut is not fully priced until June, though March remains a “live” meeting if inflation cooperates and labor market weakness persists. A core CPI print closer to 2.9% would reinforce the view that inflation is grinding lower and keep rate-cut expectations alive for the first half of 2026. A 3.2% print, by contrast, could briefly spook rates and equities, even if investors ultimately discount it as shutdown-related noise.

Bond markets are currently pricing what many describe as a “Goldilocks” setup: anchored long-term inflation expectations, easing services inflation, and a Fed increasingly focused on labor market deterioration rather than price stability alone. Ten-year breakeven inflation sits near 2.26%, toward the low end of its two-year range, suggesting investors do not see a meaningful inflation re-acceleration risk.

The bottom line is that November CPI is likely to be messy, incomplete, and potentially misleading at first glance. Analysts broadly agree that the underlying inflation trend is stable to slightly improving, but the absence of October data, sampling distortions, and two-month averaging will complicate interpretation. For traders, the report may be more about managing volatility than extracting clean macro signals, with greater emphasis likely placed on December CPI—when data collection normalizes—than on tomorrow’s headline numbers.