U.S. CPI Tonight Could Beat Expectations, Traders Pricing in Aggressive Rate Hike as Early as September

June 10: U.S. May inflation data hits the wires tonight at 8:30 PM ET. Shifting U.S. price levels have taken center stage for both markets and policymakers. Consensus estimates call for the May Consumer Price Index (CPI) to climb 0.5% month-over-month—nearly three times the typical pace—while year-over-year is projected to jump from April’s 3.8% to 4.2%. That would mark the fastest CPI growth since May 2023, and the first time it’s topped 4% in three years. Bond traders have piled into rate-hike bets in recent sessions, with some even tipping a move as soon as the September policy meeting. This sentiment is especially pronounced in Secured Overnight Financing Rate (SOFR)-linked options trading. After last Friday’s blowout U.S. nonfarm payrolls—way hotter than forecasts and triggering a broad bond sell-off—markets moved fast to reposition. A flurry of recent options trades now price in at least one rate hike this year, with some even betting on two total increases. That said, there’s a key caveat: the data could be skewed by statistical quirks. Last year’s fall government shutdown caused technical glitches that made it hard to accurately track housing metrics (rent, shelter costs included) for a stretch. Now that those revisions are wrapping up, May CPI could come in softer than projected—something that would ease some of the market’s built-up jitters.