Make New York Post a Preferred Source Inflation came in hotter than expected in October as energy costs continued to rise amid the Iran war – teeing up the Federal Reserve to hike interest rates next month.
The Consumer Price Index rose 0.4% over the month – slowing from a 0.6% monthly pace in September but hotter than estimates of a 0.3% rise, the Bureau of Labor Statistics said Tuesday. The 12-month inflation rate was not released due to the government shutdown last fall, which halted data collection.
Gasoline and energy costs have been driven higher by the Iran war. AP Photo/Nam Y. Huh On a core basis, which excludes volatile food and energy prices, the CPI rose 0.3% in October – the same monthly pace as September and August, and higher than estimates of a 0.2% increase.
Traders are betting on near-certain odds of a quarter-point rate hike at the Fed’s Dec. 9 meeting, with a more than 98% chance rates will be raised to the 4% to 4.25% range, according to CME FedWatch.
Speaking in London just hours before the CPI report, Fed Governor Christopher Waller said he’s leaning toward a quarter-point hike at next month’s meeting. He said if the data swayed him at all, it would be toward a larger hike – not a hold.
If core inflation rose 0.3% or more – as the data showed it did in October – the Fed should consider a half-point hike, he added.
Recent jobs data showed hiring was surprisingly strong in October and the unemployment rate fell, adding to the case for a rate hike as the Fed can remain squarely focused on inflation.
This is a developing story. Please check back for updates.
