U.S. core consumer prices rose 0.3% for a third straight month in October, meeting Federal Reserve Governor Christopher J. Waller’s threshold for considering a larger December rate increase.
Reuters reported that market bets on a 50-basis-point increase at the December meeting came close to 15% on Nov. 10. Reuters did not identify the precise hour or time zone attached to that estimate, which reflects market pricing rather than a Federal Reserve forecast.
The Bureau of Labor Statistics said its Consumer Price Index for All Urban Consumers rose 0.4% on a seasonally adjusted basis in October, after increasing 0.6% in September. The core index, which excludes food and energy, also rose 0.3% in August and September. Reuters said economists it surveyed had expected a 0.3% headline increase and a 0.2% core gain.
Shelter prices rose 0.3% and made up more than 30% of October’s overall monthly increase, the bureau said. Food prices were up 0.5%, while energy prices increased 0.7%.
Before the release, Waller said he would support a quarter-point increase in December even if inflation improved. He said that if core inflation remained around 0.3% or higher, “a 50 basis point hike in the policy rate should be considered at the December meeting.” Waller said his views did not necessarily represent those of other Federal Reserve Board members or the Federal Open Market Committee (FOMC).
The Fed’s 2% inflation goal is measured using the Personal Consumption Expenditures index, a measure separate from CPI. Waller said inflation on that measure remained above the goal. He also identified prices for high-tech goods tied to the artificial intelligence buildout and the pass-through of energy costs as areas to watch, rather than established causes of October’s increase.
Reuters reported that the two-year Treasury yield was 4.74% on Nov. 10, up 19.28 basis points and on pace for its largest one-day increase since April 2025, which the outlet called the “tariff tantrum.” Reuters also said higher prices for auto insurance, public transportation and medical services could particularly affect middle- and lower-income households.
The FOMC is scheduled to meet Dec. 8-9. The November CPI release is set for 8:30 a.m. ET on Dec. 10, the morning after the meeting concludes.
