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October CPI rise of 0.4% boosts likelihood of December Fed rate hike

U.S. October CPI rose 0.4%, boosting odds of a December Fed rate hike.

Updated 1 min read

Published by Agyata NewsroomEditorial policyCorrections

Key points

  • U.S. consumer prices rose 0.4% in October, higher than the expected 0.3%.
  • Shelter costs increased 0.3% and represented more than 30% of the monthly inflation rise.
  • Federal Reserve Board member Christopher Waller warned that a 25 basis point hike could risk central bank credibility.

Why it matters. The data suggests the Federal Reserve may raise interest rates in December, potentially by 0.25 or 0.50 percentage points, to address persistent underlying inflation pressures before the year ends.

Updated Sources: Cbsnews

U.S. consumer prices climbed 0.4% in October, exceeding economist forecasts and increasing the probability of a Federal Reserve rate increase at the December 8-9 meeting. Core inflation also rose 0.3% for the third consecutive month, while shelter costs accounted for over 30% of the total monthly gain. Federal Reserve Board member Christopher Waller suggested a 0.50 percentage-point hike might be necessary to maintain central bank credibility.

Latest updates

October CPI rise of 0.4% boosts likelihood of December Fed rate hike

Inflation in the United States accelerated in October, with the Consumer Price Index rising at a monthly pace of 0.4%. This figure exceeded the forecasts of economists and offers little relief to Americans grappling with high living costs. The hotter-than-expected data has raised expectations that the Federal Reserve will increase interest rates at its upcoming meeting in December. The Labor Department released the report on Tuesday, highlighting persistent price pressures across the economy. This monthly increase reinforces the argument for tighter monetary policy to curb inflationary trends.

Cbsnews

Sources

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