Natixis Sees September CPI Stability as Fed Rate Cycle Nears Peak

The firm anticipates a 0.19% increase in core inflation and 0.6% for the headline component. These figures suggest a return to a normalizing trajectory, with year-over-year core inflation holding steady at 2.4%. While supply-induced price shocks from the Iran War and specific tariff policies created recent noise, Natixis maintains that underlying inflation breadth is showing signs of improvement.

Fed policymakers are currently scrutinizing alternative metrics, such as trimmed mean and median inflation, to gauge price pressures more accurately. Despite this, the central bank’s recent reliance on month-to-month data creates a challenging environment for forecasting. Natixis expects the Federal Reserve to hold rates steady at its late October meeting, citing a desire to assess economic variables and avoid political complications ahead of the early November mid-term elections. A single additional adjustment in December or January remains a possibility if policymakers decide a further nudge is required to anchor the inflation trend.