UBS On-Air: Market Moves UBS On-Air: Paul Donovan Daily Audio 'Inflation (data) is coming'
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Oct 10, 2025 Despite a government shutdown, the US is set to release September's consumer price inflation data, crucial for Social Security adjustments. This information is also pivotal for the Federal Reserve’s upcoming decisions. Additionally, the US Treasury is stepping in to support Argentina’s peso with a significant financial package. Meanwhile, Japan's producer prices remain steady, though car exporters are cutting prices due to US tariffs. The calm data landscape hints at a hawkish approach from the Fed, emphasizing the ongoing challenges in the economy.
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September CPI Will Be Published
- The US will publish September CPI despite the shutdown to enable cost-of-living adjustments for social security.
- The data must be released legally before November 1 and will aid the Fed and inflation-linked bond holders.
Many Payments Tie Directly To CPI
- Large parts of US spending automatically rise with inflation because benefits are indexed to CPI.
- This legacy linking means CPI publication affects major fiscal outlays and bond indexing.
Inflation Bonds Follow Published CPI
- US inflation-linked bonds pay according to the published CPI figure, not an independent guarantee.
- Market holders rely on the official release for real returns rather than an automatic linkage beyond the data.