Hot October core CPI puts a half-point December Fed hike on the table

Core consumer prices rose 0.3% in October, above the 0.2% economists expected. Fed Governor Waller had said that reading could lead him to consider a half-point hike on Dec. 8-9.

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- Headline CPI: +0.4% in October, after +0.6% in September
- Core CPI: +0.3% for the third straight month; 0.2% was expected
- Auto insurance, public transportation and medical services jumped unexpectedly
- Waller: a 0.3% core reading would lead him to consider a half-point hike Dec. 8-9
- Logan: the Fed needs to raise rates by at least a half point before pausing to assess
- Current target range: 3.75% to 4%
- Markets priced a quarter-point December hike as nearly certain, and bets on a larger increase reached close to 15% by midmorning, Reuters said. The 2-year Treasury yield posted its biggest rise since early April 2025.
- Higher Fed rates tend to lift high-yield savings and CD offers. The Fed decides on Dec. 9, and market pricing is not a decision.

Read full analysis on srnnews.com

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