Barclays estimate core CPI to come in at 0.36% m/m, with headline CPI at 0.43% m/m for September. The first thing to address is that the firm says "September data quality should remain unaffected since collection finished before the shutdown, but prolonged closures may affect October data collection and quality".
Going into the details of their estimates, the firm points out that:
“We expect the uptick to be led entirely by core goods prices, which we forecast at +0.4% m/m amid more tariffs passthrough. We estimate that core services inflation eased to 0.3% m/m, amid less shelter inflation”.
This leads to Barclays estimating core PCE inflation to be at 0.31% m/m, some 9 bps higher than in August.
Looking out to the closing stages this year, the firm argues that:
“We expect fairly stable but elevated tariffs passthrough in the coming months to keep core CPI rounding to 0.4% m/m through January 2026. While tariff pressures have been slow to materialise, they are catching up with the 2018-19 experience, and about 40% of the expected tariff-related price increases have materialised thus far.”
They estimate core CPI to accelerate to 3.5% y/y in December this year before moderating to 2.7% y/y by December 2026.
All that being said, the Fed remains on track to cut rates again later this month and also in December. Barclays says that even with the numbers, "private data suggest more of the same for the labour market and spending" and that will allow the Fed to stay on its current path going into year-end.
