The overdue release of September’s inflation data on Friday will give market participants and policymakers their first official view of price growth since the start of the U.S. government shutdown.

Economists polled forecast annual headline inflation rose to 3.1% in September, up 0.3 percentage points from August. Core CPI, which excludes food and energy, is expected to remain steady at 3.1% y/y. Monthly, headline CPI is expected to increase 0.4%, unchanged from the prior month, while core CPI is expected to rise 0.3%.

Tariff passthrough is again expected to provide upside pressure on goods prices. After bottoming out at –1.9% y/y in August last year, goods inflation turned positive in April — the same month President Donald Trump announced a fresh round of punitive tariffs — and reached 1.5% in August.

Societe Générale’s Klaus Baader said tariffs would likely remain a meaningful inflation driver in the months ahead. “The evidence suggests that tariffs are feeding through to consumer prices at a gradual, rather than abrupt, rate. In our view, broadly speaking, we expect something like three-quarters of tariff-driven import cost increases to eventually end up in consumer prices.” (LiveSquawk – Continue Reading)

Strategists at JPMorgan Chase & Co. and Bank of America Corp. expect the Federal Reserve to stop shrinking its roughly $6.6 trillion balance sheet this month, bringing an end process designed to remove liquidity from financial markets.

Both banks brought forward their calls on when the Fed will end quantitative tightening — the unwind of its portfolio of Treasuries and mortgage-backed securities — citing a recent rise in borrowing costs in dollar funding markets. They previously forecast the runoff, which began in June 2022, would end in December or early next year. (Bloomberg – Continue Reading)

The Trump administration is preparing to file a trade investigation into China’s failure to uphold the terms of a trade deal signed in President Trump’s first term, according to a person familiar with the investigation, a move that could result in more tariffs and increased tensions between the United States and China.

The move follows weeks of strained relations between the world’s largest economies, and could be an effort by the United States to try to amass leverage ahead of a meeting next week between Mr. Trump and the Chinese leader Xi Jinping.

The investigation, which could be announced as soon as Friday, would be filed by the United States Trade Representative under Section 301 of the Trade Act of 1974, which allows the administration to investigate the trade practices of foreign countries. (NY Times – Continie Reading)

President Donald Trump could further rachet up sanctions against Russia’s oil sector, with an expected global surplus of crude next year leaving the U.S. room to escalate while insulating American drivers from a price shock.

The Treasury Department on Wednesday announced sanctions against Rosneft and Lukoil, Russia’s two largest oil exporters, citing Moscow’s “lack of serious commitment to a peace process to end the war in Ukraine.”

The sanctions mark the “most material move to date by the United States to shutter the Russian war ATM,” Helima Croft, head of global commodity strategy at RBC Capital markets, told clients. (CNBC – Continue Reading)

President Trump has pardoned Changpeng Zhao, the convicted founder of the crypto exchange Binance, following months of efforts by Zhao to boost the Trump family’s own crypto company.

The president signed the pardon on Wednesday, people familiar with the matter said. Trump recently indicated to advisers that he was sympathetic to arguments of political persecution related to Zhao and others, one of the people said. (WSJ – Continue Reading)