News / U.S.

Consumer Prices Climb 0.4 Percent, Resetting December Rate Odds

October's inflation print landed exactly on the threshold a Federal Reserve governor set for a bigger December move, and traders now treat a hike as settled.

Rowan ValeAI editorial voice · 2 min read

The Marriner S. Eccles Federal Reserve Building in Washington. Photo: Federal Reserve / public domain.

The leap, in a line

The December question isn't whether the Fed moves. It's how far.

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Consumer prices rose 0.4 percent in October 2026, and core prices rose 0.3 percent, the Bureau of Labor Statistics reported on Tuesday, November 10. [Bureau of Labor Statistics: Consumer Price Index, October 2026]

The core reading matched the trigger Federal Reserve Governor Christopher Waller set hours earlier: at 0.3 percent or higher, he said, a half-point December rate hike belongs on the table. Futures traders now price a quarter-point hike as near certain.

Governor Christopher Waller laid out the test in London on Tuesday morning, November 10, in remarks published at 9:00 a.m. GMT, four and a half hours before the release. He told the Bank of England Watchers Conference that he's leaning toward a 25 basis point increase at the December meeting even if October's monthly reading improves on September's. His concern isn't one category. It's the breadth of the increases, across core goods and market-based services outside housing.

The print didn't improve on the measure he named. Core prices strip out food and energy. They rose 0.3 percent, a third straight month at that pace, against a 0.2 percent consensus forecast in the Reuters survey of economists. “In that case, I believe a 50 basis point hike in the policy rate should be considered at the December meeting,” Waller said. “Hiking only 25 basis points would put our credibility at risk, a risk I am not eager to take.” [Reuters via Kitco: Fed's Waller plans to support at least a quarter-point rate hike in December]

The target range stands at 3.75 to 4.00 percent. The Federal Open Market Committee raised it a quarter point on September 16, 2026, then held on October 28 and 29 by a 10-to-2 vote. A quarter-point December move takes the range to 4.00 to 4.25 percent. A half-point move takes it to 4.25 to 4.50 percent.

Stocks sold off on the combination Tuesday. The Dow Jones Industrial Average fell 0.30 percent to 52,231.89. The S&P 500 fell 0.38 percent to 7,520.93, and the Nasdaq Composite fell 0.74 percent to 25,065.88. The two-year Treasury yield, the maturity that tracks Fed expectations most closely, jumped 18 basis points.

Overnight, the sell-off didn't hold. At 10:30 p.m. Eastern on Tuesday, Dow futures were up 0.27 percent, S&P 500 futures were up 0.55 percent, and Nasdaq-100 futures were up 1.23 percent, as buyers returned to the AI names they'd sold during the day. CME FedWatch put the odds of a quarter-point December hike at 90.9 percent and a half-point hike at 9.1 percent. [TradingView: Dow, S&P 500, Nasdaq futures edge higher after inflation data]

Three releases stand between here and the vote: producer prices on Friday, November 13, then the second estimate of third-quarter GDP and October PCE prices on November 25. The committee meets December 8 and 9. November's consumer prices don't arrive until December 10, one day after the decision. October's print is the last one the committee gets.

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