# US October CPI Beats Forecasts: 25-Bp Hike Priced In, 50-Bp Bets Rise
US headline and core inflation exceeded forecasts. Markets now price a 100% chance of a 25-bp December hike, while 50-bp odds rise. Yields jumped; equities and Bitcoin fell.
## CPI and Annual Inflation
BLS reported monthly CPI growth of 0.4%, above the 0.3% forecast but below September’s 0.6%. Core CPI rose 0.3% versus 0.2% expected, its third straight month at that pace.
No annual rate was reported because last year’s federal shutdown halted collection of October 2025 prices. September’s annual rates were 3.7% headline and 2.6% core. October estimates are near 4% (FactSet: 4.0%; Bank of America: 3.8%); the three-month annualized pace is 5.7%
## Components
Food prices rose 0.5%; shelter gained 0.3%, accounting for over 30% of the monthly increase. Recreation,healthcare,auto insurance,household goods and education also rose. Used vehicles and communication prices fell. Despite pump prices dropping over 4%, CPI beat forecasts, signaling broader non-energy pressure.
## Fed Pricing and Waller
Before CPI, markets priced an 80%–85% chance of a 25-bp December hike;afterward, this reached 100%. A 50-bp move is gaining probability. The Fed raised rates to 3.75%–4.00% in September and held in October. Its final meeting is Dec. 8–9.
Fed Governor Christopher Waller backed a 25-bp hike even if inflation eased,but said core CPI of 0.3% or higher would warrant considering 50 bps. Waller warned a 25-bp-only move could risk the Fed’s credibility
## Market Reaction
- 2-year yield: +14 bps to 4.69%; 10-year: +6.5 bps to 4.93%
- Nasdaq 100 futures: -1.15%; S&P 500 futures: -0.5%
- $BTC fell about 1% to $73,600
## Crypto and Risk Assets
Three consecutive 0.3% core readings raise the prospect of tightening beyond December. Stronger 50-bp pricing could lift yields,weaken risk appetite and increase crypto volatility. Markets will watch PPI,Fed comments and the Dec. 8–9 meeting
US headline and core inflation exceeded forecasts. Markets now price a 100% chance of a 25-bp December hike, while 50-bp odds rise. Yields jumped; equities and Bitcoin fell.
## CPI and Annual Inflation
BLS reported monthly CPI growth of 0.4%, above the 0.3% forecast but below September’s 0.6%. Core CPI rose 0.3% versus 0.2% expected, its third straight month at that pace.
No annual rate was reported because last year’s federal shutdown halted collection of October 2025 prices. September’s annual rates were 3.7% headline and 2.6% core. October estimates are near 4% (FactSet: 4.0%; Bank of America: 3.8%); the three-month annualized pace is 5.7%
## Components
Food prices rose 0.5%; shelter gained 0.3%, accounting for over 30% of the monthly increase. Recreation,healthcare,auto insurance,household goods and education also rose. Used vehicles and communication prices fell. Despite pump prices dropping over 4%, CPI beat forecasts, signaling broader non-energy pressure.
## Fed Pricing and Waller
Before CPI, markets priced an 80%–85% chance of a 25-bp December hike;afterward, this reached 100%. A 50-bp move is gaining probability. The Fed raised rates to 3.75%–4.00% in September and held in October. Its final meeting is Dec. 8–9.
Fed Governor Christopher Waller backed a 25-bp hike even if inflation eased,but said core CPI of 0.3% or higher would warrant considering 50 bps. Waller warned a 25-bp-only move could risk the Fed’s credibility
## Market Reaction
- 2-year yield: +14 bps to 4.69%; 10-year: +6.5 bps to 4.93%
- Nasdaq 100 futures: -1.15%; S&P 500 futures: -0.5%
- $BTC fell about 1% to $73,600
## Crypto and Risk Assets
Three consecutive 0.3% core readings raise the prospect of tightening beyond December. Stronger 50-bp pricing could lift yields,weaken risk appetite and increase crypto volatility. Markets will watch PPI,Fed comments and the Dec. 8–9 meeting
