Americans are tired of inflation—last week's election results proved it—but last month's decline in gasoline, diesel, and jet fuel prices may have offered some relief. A survey of economists predicts the Consumer Price Index (CPI), due Tuesday (November 10), will rise 0.3% month-over-month. Economists also expect core inflation, excluding food and energy prices, to rise 0.2% month-over-month. September's CPI report showed prices rising 0.6% month-over-month and 3.7% year-over-year. (The October data will not include year-over-year figures because the U.S. government shutdown disrupted the agency's data collection, forcing it to skip the October 2025 CPI report entirely.)

Political background: 84% of voters believe the price increases stem from Trump's policies, while the economy is the top priority for 39% of voters.

Even if the October data offers some relief, it will still clearly demonstrate the continued price pressures facing American consumers. This pressure was a key factor in the Democrats' significant victory in last week's midterm elections. According to polls, a staggering 84% of voters attributed rising prices to the Trump administration's policies, while another 39% explicitly stated that the economy was their primary consideration when voting. These policies primarily include tariff rhetoric targeting global trade, which has driven up the cost of imported goods, and the ongoing conflict with Iran. Since the conflict began in February, it has pushed up the price of regular gasoline by approximately 40%, and diesel prices by about 70% since the beginning of the year. The rise in fuel costs has quickly translated into overall inflation, as diesel is a critical input for the transportation industry, and transportation networks directly determine the end-market prices of everyday goods such as groceries. Economists have repeatedly warned that rising commercial fuel prices could ripple through the entire economic chain in a short period, increasing the burden on consumers at every level, from logistics costs to shelf prices. The midterm election results, to some extent, reflect voters' dissatisfaction with this transmission process, making inflation a central focus of political maneuvering.

Oil prices ease: Gasoline fell from $4.41 to $4.18, with Citi expecting limited transmission.

Gasoline prices fell significantly in October, potentially creating downward pressure on inflation data. On October 1st, the average retail price of gasoline across the US was $4.41 per gallon, dropping to $4.18 by the end of the month, a decrease of over 5%. This change coincided with the window of opportunity for Americans to vote early or prepare for Election Day, reducing travel-related costs. Citigroup economists predict that upcoming data will show airfares stabilizing or even declining, while the transmission of energy costs to commodity prices will be relatively limited. They also point out that housing inflation and some service prices may slow to some extent. Entering November, gasoline prices continued to decline, falling to around $4 per gallon on Monday. Although this price is still significantly higher than before the Iranian conflict, the short-term decline has provided substantial relief for consumers. Energy prices have a high weighting in the CPI basket, and their decline will directly drag down the overall month-on-month increase, which is one of the main reasons why the market expects October data to be weaker than September's.

The easing may be short-lived: IEA's release of 400 million barrels of oil reserves will likely support oil prices.

Even though the upward momentum in oil prices has temporarily slowed, analysts generally believe this easing may be unsustainable in the long term. During the conflict in Iran, member countries of the International Energy Agency (IEA) released approximately 400 million barrels of crude oil and related products such as diesel into the global market to alleviate supply shortages and soaring prices. This large-scale release of inventories increased market supply in the short term, directly suppressing oil prices. However, a chief economist at one institution pointed out: "Once the current conflict in the Middle East subsides, replenishing these inventories will provide a floor for prices." The core meaning is that the current decline in oil prices is partly due to temporary inventory releases, rather than a fundamental improvement in supply and demand fundamentals. Once the conflict ends or the situation stabilizes, countries will inevitably initiate restocking operations to restore strategic reserve levels. Restocking demand will create new buying support, limiting further downside for oil prices and potentially reigniting inflationary pressures from the energy sector. Therefore, while the market is trading on the short-term easing, it also needs to be wary of the risk of a medium-term resurgence in oil prices and avoid overestimating the current downward trend.

Policy Path: The Federal Reserve is expected to raise interest rates for the second time this year at its December 8-9 meeting.

Given the persistently stubborn inflation, most economists believe the Federal Reserve will proceed with its second rate hike this year. The Fed's next two-day interest rate meeting is scheduled for December 8-9, just before the release of the next inflation data on December 10. This timing has significant policy implications: the December meeting's decision will be primarily based on the October CPI data released today, rather than the subsequent November data. Therefore, Tuesday's report—especially the core inflation month-over-month reading—will be a direct input variable for the market pricing in the probability of a December rate hike. If the core month-over-month figure is close to or higher than the expected range of 0.2% to 0.3%, it will further solidify rate hike expectations; if it is significantly weaker than expected, it could trigger a reassessment of the policy path. Traders and analysts are closely watching the correlation between this data and Fed communications to determine the final trajectory of interest rates before the end of the year.

in conclusion

The US October CPI is expected to rise 0.3% month-over-month overall and 0.2% core, a slowdown from September's 0.6%, with gasoline prices falling from $4.41 to $4.18 per gallon being the main easing factor. However, due to the government shutdown, there will be no year-over-year data for October. The political backdrop is that 84% of voters believe the price increases are due to Trump's policies, and 39% prioritize the economy, explaining the motivation behind the Democratic Party's landslide victory in the midterm elections. Citigroup expects airfares to stabilize, energy price transmission to be limited, and housing and service prices to slow; however, institutions warn that the IEA has released 400 million barrels of crude oil and refined products, and restocking after the conflict subsides will support oil prices, making the easing measures unsustainable. Economists believe the Federal Reserve will still raise interest rates for the second time this year at its December 8-9 meeting—since the next inflation data will be released on December 10, Tuesday's CPI will be a direct input for the December decision, with the core month-over-month reading being particularly crucial.