Just another data point to fight over without any real answers for now
The estimate is for headline annual inflation to keep at the highs, at +5.3% y/y in October while core inflation is estimated to hold at +4.0% y/y.
Expect Team Transitory to be all over any slight dips in inflation pressures but in the case of any surprise beats, they will maintain that "this is very much expected" with the narrative being that the trend should keep up going into early next year at least.
As such, don't expect there to be any real takeaways from today's report.
A higher reading mainly reaffirms the ongoing trend that price pressures are surging but there isn't much evidence to deny Team Transitory's argument that all of this will abate and ease as we look towards the middle of next year.
In short, the inflationistas have more to lose in the next few months if price pressures don't exactly keep with the trend that we have been seeing throughout the year so far.
But in any case, we can only wait on the data to provide us more clarity with the macro situation globally and that won't be sorted out until 1H 2022 at the very least.
While the data today may see market participants get a little jumpy, remember this is going to be a marathon and not a sprint when it comes to the inflation debate.
