Traders raise odds of 50 bps Fed rate hike as CPI rise exceeds expectations

Listen to this article in summarized format Listen Loading... × × Subscribe to Unlock AI Briefing and Premium Content New Year Offer 24 Hours Left Subscribe Now Already a member? Sign In What's Included Exclusive Stories Daily ePaper Access Smart Market Tools Curated Investment Ideas Ad-lite Experience Subscription Reuters Wall Street traders raised the odds of a .50% (or 50 bps) rate hike the US Federal Reserve on Tuesday after October inflation rose higher than expected, including a mark set by a key Fed official for considering faster rate hikes. The US Consumer Price Index climbed 0.4% on a monthly basis in October, a drop from the 0.6% in September, as energy inflation slid. But the core inflation, the index excluding volatile food and energy prices, climbed 0.3% for the third straight month, showing strong basis of inflation spreading across the economy. US Markets Powered By As on 10 Nov 2026, 08:49 PM IST S&P 500 Top Gainers Take-Two Interactive 220.59 (6.36%) Advanced Micro Devices 532.41 (4.68%) Broadcom 332.36 (4.03%) Steel Dynamics 236.37 (3.87%) Gainers » S&P 500 Top Losers Coterra Energy 32.56 (-8.62%) GE Vernova 789.22 (-4.84%) AppLovin 392.90 (-4.17%) Target 158.99 (-4.17%) Losers » In remarks delivered overnight in London, Federal Reserve Governor Christopher Waller indicated that a 0.3% increase in core inflation for October could lead him to consider a larger, 50-basis-point interest rate hike at the Fed's December 8-9 policy meeting. Although markets had largely priced in a 25-basis-point increase, expectations of a bigger move were gaining traction amid a widespread bond market selloff, with the probability rising to nearly 15% by midmorning. Waller said that if core consumer prices climb 0.3% or more from September, the central bank may need to take stronger action. Speaking at an event organised by King's Business School and the Money Macro & Finance Society, he said a half-percentage-point rate increase should be considered under such circumstances. He cautioned that opting for a smaller hike could undermine the Fed's credibility in tackling inflation, particularly as price pressures remain elevated and appear to be spreading across the economy. Economists had forecast core inflation to ease to 0.2% month-on-month in October. Live Events The inflation figures, coupled with Waller's hawkish remarks, triggered a sharp selloff in US Treasury bonds. The yield on two-year Treasury notes, which closely tracks expectations for Fed policy, recorded its biggest single-day increase since early April 2025. Add as a Reliable and Trusted News Source Add Now! (You can now subscribe to our ETMarkets WhatsApp channel ) Read More News on Federal Reserve interest rates rate hike Consumer Price Index bond market Treasury market policy rate Fed rate hike October inflation US inflation (What's moving Sensex and Nifty Track latest market news , stock tips , Budget 2025 , Share Market on Budget 2025 and expert advice , on ETMarkets . Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today . Top Trending Stocks: SBI Share Price , Axis Bank Share Price , HDFC Bank Share Price , Infosys Share Price , Wipro Share Price , NTPC Share Price ... more less (You can now subscribe to our ETMarkets WhatsApp channel ) Read More News on Federal Reserve interest rates rate hike Consumer Price Index bond market Treasury market policy rate Fed rate hike October inflation US inflation (What's moving Sensex and Nifty Track latest market news , stock tips , Budget 2025 , Share Market on Budget 2025 and expert advice , on ETMarkets . Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today . Top Trending Stocks: SBI Share Price , Axis Bank Share Price , HDFC Bank Share Price , Infosys Share Price , Wipro Share Price , NTPC Share Price ... more less Prime Exclusives Investment Ideas Stock Report Plus ePaper Wealth Edition Business of Odd Things: The farm that needs no land, freshwater, or fertiliser KYC and KYB: Inside Pidilite, the company that turned Fevicol into a word for a strong bond – Part 1 of 3 Seoul halts trading, Nifty has its best week since 2021: Money leaving the AI trade – will it land in India? Junk bonds are cracking at the bottom. Will the noise get loud enough to make ‘junk bond’ a household term again? PNG connections rise half a million, but how many use piped gas for cooking? Some elections matter more than you know: No crop changed in the fields, yet sugar, coffee and soya got cheaper in a day 1 2 3 View all Stories