A 0.3% increase in underlying U.S. consumer prices in October reached the level Federal Reserve Governor Christopher J. Waller set for considering a larger December rate increase, putting his quarter-point preference in focus.
The Bureau of Labor Statistics said Tuesday that prices excluding food and energy rose 0.3% from September, matching the monthly increases in August and September. The broader consumer price index rose 0.4%, following a 0.6% increase in September.
Waller spoke in London before the report was released at 8:30 a.m. ET. He said officials should consider a half-point increase if October's monthly core reading was around 0.3% or higher. His preferred course, if the economy developed as he expected, was a quarter-point increase. His remarks did not say how he would respond to the newly released figure.
Waller said inflation remained too high relative to the Fed's 2% goal, while describing the labor market as stable. He cited energy costs and prices associated with the artificial intelligence buildout as possible sources of continued inflation pressure. He had argued for a December increase even if inflation eased.
The Federal Open Market Committee held its target rate range at 3.75% to 4% on Oct. 28. Two members favored a quarter-point increase. Waller supported the hold, saying earlier Fed guidance had already led markets to expect tighter policy and gave the committee room to wait.
Changes to the Fed's rate target can affect other interest rates and, through them, spending by households and businesses. Waller has warned that failing to deliver signaled increases could lower market rate expectations and ease financial conditions.
The inflation report omitted most annual comparisons for October. A lapse in appropriations prevented the bureau from collecting the corresponding survey data in October 2025.
The committee meets Dec. 8-9 and is scheduled to announce its rate decision at 2 p.m. ET on Dec. 9. The November consumer price report is due Dec. 10 at 8:30 a.m. ET.
