Key facts
- October CPI rose 0.4%, above the 0.3% forecasters expected, and slower than September's pace, the report said.
- CME FedWatch Tool showed traders pricing nearly 90% odds of a 25 basis point December hike and 10% odds of 50 basis points.
- The Dow Jones Industrial Average was at 52,075.42, down 0.6% or 314.33 points, around 10:45 a.m. ET.
- The Nasdaq 100 was at 27,701.12, down 0.74%, around 10:45 a.m. ET.
- Daniel Siluk of Janus Henderson said the inflation data cements the case for a December rate hike.
- Jeff Schulze of the Franklin Templeton Institute said Waller's comments make a December rate hike a done deal.
US consumer prices rose 0.4% in October, above the 0.3% forecasters expected, according to a CPI report published on November 10, 2026. The report said prices rose slower than they did in September but still at a faster pace than forecasters expected.
Ahead of the release, Federal Reserve Governor Christopher Waller indicated he would support a larger rate hike if the inflation picture did not improve. Waller said that if October inflation looked similar to past months, "a 50 basis point hike in the policy rate should be considered at the December meeting. Hiking only 25 basis points would put our credibility at risk, a risk I am not eager to take."
Rate hike odds for the December policy meeting rose. According to the CME FedWatch Tool, traders saw nearly 90% odds of a 25 basis point hike and 10% odds of a 50 basis point move.
Bond yields rose following Waller's comments and the CPI report. The 10-year Treasury yield climbed 13 basis points to 4.99%, and the 2-year Treasury, which the report described as most sensitive to Fed policy expectations, climbed 19 basis points to 4.73%.
Around 10:45 a.m. ET, the S&P 500 was at 7,497.79, down 0.7%; the Dow Jones Industrial Average was at 52,075.42, down 0.6% or 314.33 points; and the Nasdaq 100 was at 27,701.12, down 0.74%.
Daniel Siluk, a portfolio manager at Janus Henderson, said the outlook has dimmed as inflation has moved in the wrong direction over the last three months. "For the Federal Reserve, we think this cements the case for a December rate hike, particularly following Governor Waller's comments earlier this morning around the risks from persistent inflation," he said.
Jeff Schulze, head investment strategist at the Franklin Templeton Institute, said Waller's comments make clear a December rate hike is a done deal. "Today's release will be a headwind to risk assets as investors price the possibility of a 50bp hike in December and additional hikes beyond," Schulze said, "with higher front-end yields and a stronger dollar weighing on equity valuations."