Two Federal Reserve officials have warned that inflation remains a concern ahead of Tuesday’s U.S. consumer price report, a key data release before the central bank’s December rate decision.
The Fed held the target range for its benchmark rate at 3.75% to 4% on Oct. 28 in a 10-2 vote. Both dissenters favored a quarter-point increase. The decision followed a quarter-point increase in September. Officials’ September projections put the median appropriate rate at 4.1% at the end of both 2026 and 2027. Those figures represent individual assessments, not a commitment about future decisions.
Richmond Fed President Tom Barkin said Monday that resilient demand was sustaining price pressure and firms were trying to pass on cost increases they had previously absorbed. He said inflation posed the greater risk if the economy stayed on its current course, but urged care because demand could weaken. Barkin also described stronger spending by wealthy households and vulnerability among lower-income consumers.
Chicago Fed President Austan Goolsbee expressed concern about inflation spreading through services. He also pointed to demand from artificial intelligence data center construction as a possible source of economic overheating.
In excerpts carried by FXStreet, Rabobank’s RaboResearch team interpreted the officials’ remarks as leaving open the possibility of further rate increases. The bank cited persistent core inflation, particularly in services, and linked the coming inflation report to the outlook for U.S. yields. Neither official committed to supporting an increase at the next meeting.
The U.S. Bureau of Labor Statistics (BLS) is scheduled to release October consumer price index (CPI) data at 8:30 a.m. ET (13:30 UTC) Tuesday. September’s headline index rose 0.6% from August and 3.7% from a year earlier. The index excluding food and energy increased 0.3% for the month and 2.6% over 12 months. Gasoline accounted for more than half of the monthly headline increase, according to the BLS.
The BLS will omit 12-month changes for most October indexes because comparable October 2025 data are unavailable following that year’s federal funding lapse. The Fed’s next rate decision is scheduled for Dec. 9.
