US CPI Inflation Hits 0.4% in October, Exceeding Market Expectations

A December interest rate increase now appears increasingly likely after October’s inflation figures came in hotter than economists anticipated. Federal Reserve Governor Chris Waller has even indicated that a larger 50-basis-point hike could be considered if inflation remains elevated.

Although inflation cooled slightly from September’s elevated reading, the latest data exceeded market expectations and remained considerably above the Fed’s 2% target. This has increased concerns that the central bank could tighten monetary policy again at its final meeting of the year next month.

The Consumer Price Index (CPI) increased 0.4% in October, slowing from September’s 0.6% rise but exceeding economists’ expectations of a 0.3% increase.

Core CPI, which excludes volatile food and energy prices, climbed 0.3% during the month. The reading matched September’s increase but came in above the 0.2% forecast.

The Bureau of Labor Statistics (BLS) did not publish the annual CPI figure because the October 2025 comparison report was unavailable due to the government shutdown at that time.

Bitcoin extended its earlier losses following the inflation release, falling another 1% to approximately $73,600. U.S. stock futures also turned lower, with Nasdaq 100 futures dropping 1.15% and S&P 500 futures declining 0.5%.

Treasury yields had already moved higher ahead of the inflation announcement after Fed Governor Chris Waller suggested overnight that another rate increase could be necessary in December, even if inflation data came in weaker. He also indicated that policymakers might consider a 50-basis-point increase if the CPI figures showed stronger-than-expected price pressures.

Following the release, the 10-year U.S. Treasury yield climbed 6.5 basis points to 4.93%. The two-year yield recorded a sharper increase of 14 basis points to 4.69%, as traders began factoring in a small possibility of a 50-basis-point rate hike at the Fed’s December meeting.