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Investors may gain insight into a key economic question

New inflation data is due out Thursday shortly before the opening bell, and questions are being raised around whether the economy will begin to see a pickup in inflation after months of stagnation.

The Bureau of Labor Statistics is set to release Consumer Price Index data for the month of August, and the figure will have ramifications for the equity, bond and currency markets as investors will be "very keen" to see if inflation will finally start to show its head, said Boris Schlossberg, managing director of foreign exchange strategy at BK Asset Management.

"This number is critical because the Fed has basically been hampered by very low inflation. Even though they want to raise rates, and even though the economy in the U.S. continues to grow at a relatively robust pace, there is just simply no inflation to motivate themselves to hike rates," he said Wednesday on CNBC's "Trading Nation."

Schlossberg pointed out that this data, since it will be reflective of August activity, will not contain any information from the impact of devastating hurricanes Harvey and Irma.

However, the hurricane damage and devastation may indirectly prove to push inflation higher, as massive efforts are put in place that boost rebuilding spending, as well as spending on goods and services in the aftermath.

Citi Research chief equity strategist Tobias Levkovich wrote in a note to clients Monday that the market should expect a "messy set of numbers" in the coming months, as the relief spending will likely skew economic indicators.

"Investors will be getting confusing economic reports of demand for all kinds of goods and services in the weeks ahead given the impact of several tragic natural disasters," he wrote.

Should the data released Wednesday show an upward trend, Schlossberg said, "then the market is going to feel confident that next month is also going to show an upward trend, and that is going to give the market a tremendous amount of confidence that the Fed may very well hike rates in December," and such an outcome would ultimately prove positive for bond yields and the relative value of the U.S. dollar.

Economists are anticipating a month-over-month increase of 0.3 percent and a year-over-year increase of 1.8 percent, according to FactSet data. Last month's data reflected a smaller-than-expected incline.

Another key inflation gauge, the Producer Price Index, rose less than expected on Wednesday.

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Brian Sullivan is co-anchor of CNBC's "Power Lunch" (M-F,1PM-3PM ET), one of the network's longest running programs, as well as the host of the daily investing program "Trading Nation." He is also a frequent guest on MSNBC's "Morning Joe" and other NBC properties.

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