Market Still 100% Pricing a Fed Rate Hike in December

November 10: US October headline CPI rose 0.4% month-on-month, above the market expectation of 0.3%; core CPI rose 0.3% month-on-month, above the expected 0.2%. Food prices rose 0.5%, energy prices rose 0.7%, and gasoline prices rose 1.0%. Housing costs rose 0.3%, while real earnings of private-sector employees remained unchanged. The higher-than-expected inflation data further reinforced the case for the Fed to keep raising rates.

After the CPI data was released, the market still priced in a 100% probability of a Fed rate hike in December.