US October CPI broadly exceeded expectations, reaching the threshold for significant rate hikes referenced by Waller.

On November 10, the overall and core monthly inflation rates for the US in October both exceeded expectations, which may keep the Federal Reserve on a rate-hike trajectory next month. According to data released Tuesday by the Bureau of Labor Statistics, the consumer price index excluding food and energy rose 0.3% compared to the previous month. The overall price level increased by 0.4%. The BLS did not report year-over-year changes due to interrupted data collection during last October's government shutdown.

The report indicates that price pressures continued to build ahead of this month's midterm elections, as Democrats campaigned primarily on cost-of-living concerns and regained control of both chambers of Congress. This year, the Iran war, tariffs, and a boom in data centers have all fueled inflation. This is the final CPI report Fed officials will review prior to their December 8-9 policy meeting. Investors anticipate a rate hike at this meeting to combat inflation. Ahead of the release, Fed Governor Waller stated that if core CPI rises by 0.3% or more, the Fed may need to raise rates by 50 basis points. (Jin10)