US consumer prices rose 0.4% in October, more than forecast, and traders moved a December Federal Reserve rate hike from likely to treated as certain. CNBC said the Bureau of Labor Statistics reported a seasonally adjusted 0.4% gain, above the 0.3% Dow Jones consensus and slower than September's 0.6%. Core CPI, which strips out food and energy, rose 0.3% against a 0.2% forecast, matching September. The bureau did not publish a 12-month inflation rate. Last year's shutdown stopped it from collecting October 2025 prices, so there is no comparison base. September's annual rate was 3.7%. Monday's market, which priced a December hike near 81% before this print, is in yesterday's preview.
Shelter, food, and gasoline did the lifting
The monthly details were broad. CNBC said shelter rose 0.3% and accounted for more than 30% of the headline increase. Food rose 0.5%, including 1% for snacks, 0.9% for beef, and 0.5% for meats, poultry, fish, and eggs. Energy rose 0.7% and gasoline rose 1%, while natural gas fell 0.8%. UPI said electricity rose 0.9%, food at home rose 0.4%, and food away from home rose 0.5%. It also said the unadjusted gasoline index was 37.4% higher than in October 2025, one of the few annual comparisons the bureau could still publish. Energy's 0.7% monthly gain was a sharp slowdown from September's 5.2%, and gasoline's 1% rise followed a 9.1% jump the month before.
Goods and services both stayed firm away from the volatile lines. Yahoo Finance quoted Glenmede's Jason Pride, who said services excluding housing rose 0.5%, the highest since May, and goods excluding food, energy, and used cars rose 0.4%, the highest since January. CNBC said transportation services rose 0.8%, new vehicles rose 0.2%, used cars and trucks fell 1.2%, apparel rose 0.1%, medical care commodities rose 0.5%, and airline fares rose 0.4%. Thomas Ryan of Capital Economics told Yahoo the core gain was broad, not a one-off, and that the last two months raise the chance of a larger move in December.
Waller opened the door to 50 basis points
The size of the hike is now the live question. The Fed held the target range at 3.75% to 4% on 28 October in a 10 to 2 vote, as set out in the October decision note. It meets again on 8 and 9 December. Governor Christopher Waller, speaking in London before the release, said he was leaning toward a quarter-point increase even if inflation cooled. If the data came in hot, he said, "a 50 basis point hike in the policy rate should be considered at the December meeting." He added that hiking only 25 basis points "would put our credibility at risk."
Markets heard him. Yahoo said investors priced an 85% chance of a 25 basis point hike next month and a 15% chance of 50 basis points. CNBC, using CME FedWatch, said traders fully priced a quarter-point move and put the odds of a half-point hike at 13.6%, after that larger bet had been near zero before the release. A quarter-point increase would lift the range to 4% to 4.25%. A half-point increase would lift it to 4.25% to 4.50%. James McCann of Edward Jones told Yahoo a quarter-point move is still the most likely outcome, in part because oil has been falling, but that a half-point move cannot be ruled out.
Yields jumped, and Friday's PPI is next
Treasuries sold off with the print. Reuters, via MarketScreener, said the two-year yield rose 15 basis points to 4.69% and the 10-year yield rose 9 basis points to 4.96% in the first reaction. CoinDesk's later tape had those yields nearer 4.74% and 4.99%. The differences are timing, not a second report. Ryan at Capital Economics estimated that the Fed's preferred gauge, the personal consumption expenditures price index, will rise 3.3% in October from 3.1% in September, and that the three-month annualized rate will jump to 3.7% from 2.9%. That PCE figure is an estimate. It is not a published index.
Producer prices land on Friday, 13 November. Yahoo said wholesale prices are expected to have jumped 6.6% in October. Wednesday is Veterans Day. US bond markets are closed on SIFMA's recommendation, and stock markets stay open. Bitcoin's drop toward $73,500 is in today's markets note. Gold near $4,050 and Brent under $90 are in the commodities update. Follow the rate path on the economy desk.