Recent Fedspeak, where that means heavyweights John Williams and Philip Jefferson leveraging public speaking engagements to emphasize the merits of a deliberate approach to policymaking, torpedoed the odds of an October rate hike.

I was never convinced Kevin Warsh would sanction back-to-back rate increases ahead of the US midterms in the first place, but traders and market observers were inclined — and God bless ’em if this is a testament to the credulity that goes along with having never experienced or studied autocracies — to view September’s token hike as a reaffirmation of institutional independence.

If Warsh was willing to chance Trump’s ire last month, that meant he’s not beholden, which in turn suggested a Warsh-led Fed may raise rates again just a few weeks later. Or so those of a gullible persuasion reckoned.

Never mind that Trump alluded to having instructed Warsh on how to go about navigating what might’ve otherwise been a mutinous September FOMC meeting. “I told– I talked to Kevin, and I said ‘You might as well vote with the board ’cause it’s not gonna matter,” Trump later said, describing his interaction with Warsh.

In any case, the disappointing September jobs report gave Warsh and anyone sympathetic to the dovish cause an excuse to hold off until December barring a truly disastrous core CPI readout on October 14. That’s the setup for this week’s marquee US macro event.

As the figure shows, consensus expects a benign 0.2% MoM print on underlying inflation, even as headline price growth’s expected to pick up sharply, driven by higher fuel costs.

Recall that core CPI overshot in the last release, cementing September’s hike. I’d suggest there’s upside risk to consensus for this Wednesday’s readout too, but… well, I doubt it matters. As noted above, it’d take an overshoot of epic (i.e., harrowing) proportions to push the odds of an October rate hike back north of 50%. Those market-implied odds are around 20% currently.

I’d be remiss not to mention pass-through risk from the surge in diesel prices. Without pretending there’s any sort of one-to-one relationship with the core CPI series, it’s worth plotting to the two together for historical context.

The red annotation suggests the current “divergence” might be unsustainable — that fuel costs “need” to fall or core inflation “will” rise. Spoiler alert: It’s not that deterministic.

A day on from the CPI update, markets will get US retail sales for September. Nominal spending surely cooled from August, when both headline and control group sales surged, underscoring sundry “resilient consumer” narratives. Consensus is looking for a 0.3% monthly advance on both aggregates for September. Consumer spending in America’s generally viewed these days as a tug-of-war between the wealth effect from buoyant stock prices and the worst household sentiment on record.

Also on this week’s crowded schedule, in order of importance: PPI (seen warm on Thursday), NAR existing home sales (seen posting a decline on Tuesday) and remarks from Warsh, who’ll be in Bangkok on Thursday for an IMF event.

Big bank earnings are this week as well, and this month’s top-tier macro data out of China will start to trickle in beginning with inflation figures from the NBS on Tuesday.