October’s inflation report has strengthened expectations of another Federal Reserve rate increase in December, with Governor Chris Waller suggesting that policymakers could even consider a 50-basis-point hike if price pressures remain stubborn.
U.S. inflation eased from September’s elevated level but still exceeded economists’ forecasts, keeping it well above the Fed’s 2% annual target. The latest figures have raised the possibility of further monetary tightening at the central bank’s final policy meeting of the year next month.
The Consumer Price Index (CPI) rose 0.4% in October, compared with a 0.6% increase in September. However, the latest reading came in above economists’ expectations of a 0.3% gain.
Core CPI, which excludes volatile food and energy components, increased 0.3% during October. The figure matched September’s reading but exceeded the 0.2% increase anticipated by analysts.
The Bureau of Labor Statistics (BLS) did not provide the year-over-year CPI figure because an October 2025 comparison was unavailable following the government shutdown at the time.
Bitcoin faced additional selling pressure after the inflation numbers were released, falling approximately 1% to $73,600. U.S. equity futures also reversed lower, with Nasdaq 100 futures declining 1.15% and S&P 500 futures losing 0.5%.
Treasury yields had already been climbing before the CPI announcement following overnight comments from Federal Reserve Governor Chris Waller. He indicated that the central bank might need to raise interest rates next month even if inflation came in below expectations. Waller also suggested that a stronger inflation reading could justify considering a more aggressive 50-basis-point increase.
Following the report, the benchmark 10-year Treasury yield advanced 6.5 basis points to 4.93%. The two-year Treasury yield climbed even further, gaining 14 basis points to reach 4.69%. The sharp move reflected growing market speculation that the Federal Reserve could potentially deliver a half-percentage-point rate increase in December.
