US core consumer prices exceed expectations in October as Fed weighs 50 basis point rate hike
US consumer prices rose 0.4% in October from the previous month, while core prices rose 0.3% for a third consecutive month, exceeding expectations. Fed officials differed over the size of a possible December rate increase. Bonds and stocks came under pressure, and voters remained concerned about the cost of living.
Data released by the US Department of Labor on November 10 showed that the Consumer Price Index rose 0.4% in October from the previous month, down from 0.6% in September. The core index, which excludes food and energy prices, rose 0.3% for the third consecutive month, above market expectations of 0.2%. Inflation remained above the Federal Reserve’s 2% target.
The US Consumer Price Index rose 0.4% in October from the previous month, down from 0.6% in September.（VietVance）
A breakdown of the data showed that gasoline prices rose 1% in October from the previous month and more than 37% from a year earlier. Electricity and food prices rose 0.9% and 0.4%, respectively, from the previous month. Persistently high energy costs also pushed up prices for air travel, public transportation, delivery, auto insurance and medical services.
Federal Reserve Governor Christopher Waller said the Fed should consider raising interest rates by 0.5 percentage points at its December 8–9 meeting to maintain its credibility in fighting inflation. Fed Vice Chair for Supervision Michelle Bowman was more cautious about accelerating rate increases. She said tighter financial conditions resulting from falling stocks and rising bond yields could pose risks to the economy, and expected inflation to ease next year.
The inflation data triggered a sell-off in US bonds, with the two-year Treasury yield posting its largest rise since early April 2025. Stocks also fell. The CME FedWatch tool showed that markets put the probability of a Fed rate increase in December at more than 80%. An Associated Press survey found that about two-thirds of respondents blamed Trump’s policies for rising prices, while nine in 10 voters considered the cost of living a deciding factor in their vote.
Source: VietVance
