Strong October Inflation All But Cements December Fed Hike

Yet another higher-than-expected reading in consumer prices has left experts believing a December interest-rate increase is "all but signed, sealed, and delivered" to battle persistent inflation.

The U.S. Bureau of Labor Statistics reported Tuesday that October's consumer price index (CPI), which measures the change in prices on a variety of consumer goods and services, rose by a seasonally adjusted 0.4% month-over-month—slower than September's 0.6% print, but ahead of Dow Jones-polled economists' estimates for 0.3%. "Core" CPI—a measure of inflation that excludes food and energy costs (factors that are more volatile than the other prices tracked by the Labor Department)—was also quicker than economists predicted. September's core inflation was up 0.3% MoM against a consensus target of 0.2%.

There were no year-over-year measures for overall inflation in October 2026 because the government did not collect enough data during the government shutdown in October 2025. (However, in some cases, it was able to collect individual-item data.)

Stock-market futures slumped in response, as the inflation data, which follows a red-hot October jobs report, now heavily suggests that the Federal Reserve will raise its benchmark interest rate during its final meeting of 2026.

"Today’s hot October core CPI print leaves a December rate hike all but signed, sealed, and delivered after Governor Waller’s notably hawkish remarks yesterday," says Jeff Schulze, Head Investment Strategist, Franklin Templeton Institute. "A steady labor market gives the Fed ample flexibility to fight core inflation that has now run above its 2% target for more than five straight years."

Here's a quick look at October's key CPI figures:

• MoM CPI: +0.4% (estimate: +0.3%)
• YoY CPI: N/A (estimate: N/A)
• MoM Core CPI: +0.3% (estimate: +0.2%)
• YoY Core CPI: N/A (estimate: N/A)

This report will be updated.

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