Bitunix Analyst:With Year-over-Year CPI Missing,October』s Sub-Components Become the Key for the Fed

November 10 — The U.S. will release October CPI at 21:30 Beijing time, but due to missing base-period data caused by the October 2025 government shutdown, this report cannot calculate year-over-year headline and core inflation rates and will only publish monthly increases. The market expects headline CPI month-over-month to fall from 0.6% in September to 0.3%, while core CPI month-over-month is expected to slow from 0.3% to 0.2%. The absence of year-over-year data makes it difficult for the market to confirm from a single number whether inflation is back on a downward track; changes in component prices for housing, transportation, used cars, consumer electronics, and services will be more informative than the headline figure. This is also the last CPI report before the Federal Reserve's December meeting, and data deviations could directly alter rate-hike expectations.

The real risk lies in whether energy costs continue to pass through to core prices. The Fed's latest research notes that the post-pandemic core inflation persistence coefficient has risen from about 0.35 to 0.65, and the pass-through from oil prices to core inflation has also strengthened markedly; if oil prices rise 10% and the new mechanism persists, model estimates suggest the core price level could be cumulatively about 0.35% higher after three years. This does not mean inflation is bound to spiral out of control, and the research has not confirmed that second-round effects have fully formed, but companies have recently mentioned inflation and cost pass-through more frequently, indicating that energy, logistics, and raw material pressures may still prolong price stickiness.

The policy signal therefore leans toward "a tightening bias with a cautious pace." Barkin believes demand and inflation remain resilient, but if AI investment falls short of expectations, or if technological substitution of labor proceeds faster than expected, both could weaken business investment and household consumption. The market currently still assigns about a 78% probability to a December rate hike; Goldman Sachs expects the U.S. 10-year Treasury yield to fluctuate in the 4.75% to 5% range, reflecting that although the bond market has cooled due to falling oil prices and safe-haven demand, it has not yet confirmed that interest-rate pressure has eased. For the crypto market, if core CPI cools, risk appetite could improve temporarily; but if services prices and energy pass-through remain strong and the dollar and Treasury yields stay elevated, liquidity recovery will be constrained, and the market reaction is more likely to depend on individual component data rather than the monthly increase alone.