Hot inflation ignites October rate hike expectations; Warsh's Bangkok speech may be a key bellwether.

US September inflation unexpectedly heated up, rekindling market expectations that the Federal Reserve may raise interest rates this month. For weeks prior, signals from central bank officials that they had time to wait had made a rate hike this month look unlikely. Fed Chair Warsh had vowed not to guide markets with his own views on the near-term monetary policy outlook. But the unexpected rise in inflation data has drawn greater attention to his remarks in Bangkok on Thursday evening New York time. At that time, he will hold a fireside chat with IMF Managing Director Georgieva. With the policy meeting approaching, the Fed will enter its so-called blackout period this Saturday. This means that if the central bank is to send any signals about a possible rate decision at this meeting, it may only be Chair Warsh who can deliver them. Meghan Swiber, a U.S. rates strategist at Bank of America, said investors are "waiting for Warsh on Thursday to give the green light for the Fed to keep raising rates." When it comes to the inflation data, Swiber said: "The breadth of this price increase was quite wide, making it hard for the Fed to ignore."