Hot October CPI lifts Fed hike bets, hits stocks and bonds
Both headline and core October CPI beat expectations, sending yields sharply higher and raising the odds of a larger December Fed hike. US equities and crypto sold off.
What we know
Coinbase Markets noted headline CPI of 0.4% m/m against 0.3% expected and core of 0.3% against 0.2%. No annual figures were published because there was no October 2025 data. Market news accounts report three-month annualized core inflation of 3.7%, the highest since January 2025, and supercore at 5.5%. A WSJ reporter says the Fed may weigh a 50bp December hike or back-to-back hikes in December and January (relayed by an aggregator, unconfirmed). Futures data cited by commentators show a 25bp December hike fully priced, and odds of a 50bp move are building from roughly 10%. The 2-year yield rose about 15bp to 4.71%, and the 10-year is near 4.99% (market news accounts, unconfirmed). The S&P 500 opened down 0.66% and the Nasdaq was down about 1%. White House NEC Director Kevin Hassett called the report disappointing, according to a market news account. One trader argues the hawkish reaction could be a fade because oil is down about 20% this month.
How the story developed
Both headline and core October CPI beat expectations, sending yields sharply higher and raising the odds of a larger December Fed hike. US equities and crypto sold off.
October CPI beat expectations on both headline and core, pushing yields up and equities and gold lower. Traders are pricing a bigger December hike after a Fed governor floated 50bp.
October CPI came in above forecasts, pushing up yields and December hike odds, including a possible 50bp move, and sending equities and gold lower.
Sources
“October US CPI is out, with both monthly readings above expectations.”
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