The latest U.S. inflation figures have increased the likelihood of another Federal Reserve rate hike in December, as October’s CPI reading exceeded market expectations. Fed Governor Chris Waller has also raised the possibility of a more aggressive 50-basis-point increase if inflation remains stronger than anticipated.
Although inflation moderated compared with September, price pressures remained above economists’ forecasts and significantly higher than the Federal Reserve’s 2% target. The development has intensified expectations that policymakers could raise borrowing costs again during their final meeting of the year next month.
U.S. headline CPI increased 0.4% in October, easing from September’s 0.6% advance but exceeding the 0.3% increase projected by economists.
Core inflation, which removes food and energy prices from the calculation, also rose 0.3%. This matched the previous month’s reading but surpassed expectations for a 0.2% increase.
The Bureau of Labor Statistics (BLS) did not release the annual CPI comparison because the October 2025 report was not available due to the government shutdown that occurred at the time.
Bitcoin extended its decline following the inflation announcement, losing another 1% to trade around $73,600. U.S. equity futures also turned negative, with Nasdaq 100 futures falling 1.15% and S&P 500 futures retreating 0.5%.
Bond markets had already shown signs of concern before the CPI figures were published. Treasury yields moved higher after Federal Reserve Governor Chris Waller indicated overnight that another rate increase could be warranted in December, even if inflation came in softer. He further suggested that a 50-basis-point move could enter consideration if the latest inflation figures proved particularly strong.
The 10-year U.S. Treasury yield increased 6.5 basis points to 4.93% following the report. Meanwhile, the two-year yield surged 14 basis points to 4.69%, reflecting growing speculation that the Federal Reserve could opt for a larger-than-usual rate increase at its December policy meeting.
