Deutsche Bank forecasts a sharp slowdown in October CPI to 0.20% month-on-month, providing a key inflation gauge for the Fed ahead of its next policy decision, though the lack of year-on-year data complicates the outlook.
Deutsche Bank's economists forecast October headline and core CPI at +0.20% month-on-month, a sharp slowdown from September's +0.65%, the fastest in six months. Since this is the last inflation reading before the next Fed meeting, a softer print would strengthen expectations for a more dovish Fed path, weighing on the dollar. The outcome is not yet known, so the direction depends on whether the data confirms the forecast.
A CPI print slowing to +0.20% month-on-month from September's +0.65%, as Deutsche Bank forecasts, would signal cooling inflation ahead of the Fed meeting and likely pull Treasury yields lower. Because the data is a forecast rather than an outcome, and the missing year-on-year figure complicates interpretation, the reaction is uncertain.
Deutsche Bank economists project October headline and core CPI to print at 0.20% month-on-month, marking a significant deceleration from September's 0.65% increase. As the final inflation report before the upcoming Federal Reserve meeting, the data is critical for assessing the central bank's policy path. Market interpretation remains complex due to the absence of year-on-year figures resulting from the 2025 government shutdown.
It is the last CPI release before the next Fed meeting, so the inflation pace feeds directly into expectations for the Fed's next rate decision. Deutsche Bank expects a slowdown to +0.20% month-on-month for both headline and core.
There will be no year-on-year inflation figure, because last year's government shutdown meant the October 2025 inflation level was never produced, so there is no prior-year base to compare against.
If inflation slows as expected to +0.20% month-on-month, markets would likely price a more dovish Fed, which tends to pull yields down; a strong surprise would do the opposite.