A key report for where inflation stood in October comes out Tuesday. Here's what to expect

Goolsbee, who doesn't vote on the rate-setting Federal Open Market Committee this year but will in 2027, didn't commit to which way he was leaning on additional rate hikes, though he said current conditions could warrant action.

"The conventional wisdom there is: Be aggressive up front, to never let the economy overheat, because once it gets overheated, it's extremely painful to get rid of that kind of overheating," he said. "So I think we've got to watch out in that space."

The CPI release comes with economic growth strong — 3.4% in the third quarter for gross domestic product and tracking at 3.5% for the final three months of the year, according to the Atlanta Fed — and the labor market seemingly in solid shape as well.

That puts the inflation reading squarely in focus.

Bank of America said it sees tariff impacts fading but that goods prices could be pushed higher because of AI demand. Further, the firm is cautious about "sticky" services prices as well as pressures from health insurance and autos.

The bank has been hawkish in terms of Fed expectations and sees a December hike as likely so long as there isn't an escalated stock market sell-off that might dissuade the central bank.

"This will be the final inflation report before the Fed's December 8-9 meeting. If our forecast is correct, we think it would effectively lock in another 25bp hike, all else equal," BofA economist Stephen Juneau said in a client note. "Absent an indisputably soft 0.1% [month-over-month] print, we doubt the inflation data will dissuade the Fed from hiking in December. The bigger risk to our call comes from financial markets."