The CPI report is the last major economic indicator ahead of the FOMC's communications blackout period before its next meeting on Oct. 27 and 28.
Dallas Fed President Lorie Logan said, "I currently estimate the target range needs to rise an additional 50 basis points or more to appropriately balance the outlook and risks for our dual mandate goals." As of Tuesday, nearly 90% of fed futures contracts expected a rate hike by the end of the year, according to CME Group, with 70% favoring one hike and almost 18% predicting two.
New York Fed President John Williams said the September hike meant "there is no need for urgency, and we have time to gather more information."
Soaring energy prices in September drove the higher-than-expected reading, but rising prices for used cars, transportation and shelter all contributed as well.
During the past two weeks, markets have largely come to expect the FOMC to hold its benchmark interest rate between 3.75% and 4% at its policy meeting this month. Fed Vice Chair for Supervision Michelle Bowman said, "I don't currently see an urgent need for further action." Two camps, one vote.
Fed Chair Kevin Warsh is set to speak at an event in Thailand early Friday morning. I'd watch that speech for any shift in tone before the blackout.