When Is the Next CPI Report?
When does the next CPI report land and what inflation rate is expected?
"When is the next CPI report?" was a question no one was asking back in the days of 2% inflation readings.
But a sluggish jobs market and softer inflation data could lead the Federal Reserve to adopt a more hawkish policy toward interest rates as 2026 gets underway.
For years after the Great Financial Crisis, no one was too concerned about when the next CPI report was due. Inflation, regardless of how the Fed measured it, remained below target for ages.
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The CPI question regained new importance when inflation hit a four-decade high in 2022, prompting the Federal Reserve to embark on its most aggressive campaign of interest rate hikes since the late Carter and early Reagan administrations.
Though inflation peaked back in 2022, the implementation of price-raising tariffs and a mostly resilient labor market have made the central bank exceedingly careful about reducing the federal funds rate from its current range of 3.50% to 3.75%.
Ease too soon, the thinking goes, and inflation could resurface, forcing the Fed to pivot back to rate hikes. Abrupt policy changes do not redound to the central bank's credibility.
That's why the Consumer Price Index, or CPI report, has become one of the market's most highly anticipated economic reports.
Markets desperately want the Fed to make the cost of capital as cheap as possible. Lower rates today equal higher returns tomorrow. There's also the concern that elevated rates could cause the economy to fall into a recession.
This explains the market's obsession with the next CPI report. And the one after that, and the one after that.
What is the CPI report?
The CPI report is released monthly by the Bureau of Labor Statistics, based on price data collected over the course of the month.
Per the BLS, prices for the goods and services used to calculate the CPI are collected in 75 urban areas throughout the country and from about 23,000 retail and service establishments.
Data on rents are collected from about 50,000 landlords or tenants. The weight for an item is derived from reported expenditures on that item as estimated by the Consumer Expenditure Survey.
The CPI report is broken down into many subcategories, but the two main ones you'll hear most about on CPI day are headline CPI and core CPI. The headline number is the main inflation gauge. Core CPI excludes volatile food and energy prices, and is considered to be a better predictor of future inflation.
The data are expressed as percent changes and are measured both year over year and month to month.
CPI vs PCE
Although the inflation data will certainly influence what the central bank does at the next Fed meeting, the CPI report is not the Fed's preferred inflation gauge. Rather, the Fed sets its long-term 2% target based on data contained in the Personal Consumption Expenditures Price Index.
While it's true the two barometers correlate closely, they measure inflation differently. As James Bullard, former president and chief executive officer of the Federal Reserve Bank of St. Louis, explains:
The FOMC focused on CPI inflation prior to 2000 but, after extensive analysis, changed to PCE inflation for three main reasons: The expenditure weights in the PCE can change as people substitute away from some goods and services toward others, the PCE includes more comprehensive coverage of goods and services, and historical PCE data can be revised (more than for seasonal factors only).
There's more, but the bottom line is that the Fed believes the PCE index has some critical advantages over CPI when it comes to formulating monetary policy.
That said, CPI is the better-known inflation gauge and is probably more relatable to what consumers experience in their daily lives.
Either way, the FOMC was quick to cut rates in late 2024 but held off lowering the federal funds rate in 2025 until its September meeting, when it issued a quarter-percentage-point rate cut. It cut again in October and December.
Amid worries of weakness in the labor market, the odds of a January rate cut stand at just 5%, according to CME FedWatch, down from 22% a month ago. In other words, traders see a 95% chance of the FOMC standing pat when it next meets. More than 70% of traders expect no change to interest rates until June, after Jerome Powell's term as Fed chair is up.
Whatever the next CPI report reveals, it will certainly factor into the market's calculus regarding the path of borrowing costs.
"The Fed will watch to see if unemployment continues to trend upward, especially since recent CPI data reported cooler than expected inflation at 2.7% and the increase in real GDP by 4.3% in 3Q demonstrates durability," writes Jerry Tempelman, vice president of fixed income research at Mutual of America Capital Management. "If the December CPI released this month is in line with this result, it may support a hawkish environment at the start of 2026."
As for the next CPI report, which will be released ahead of the open on Tuesday, January 13, the Federal Reserve Bank of Cleveland's forecast sees the CPI increasing 2.6% on an annual basis in December. Core CPI is likewise expected to rise 2.9% year-over-year. On a monthly basis, CPI is forecast to 0.2%, while core CPI is expected to rise at a slightly higher rate of 0.22%.
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