October CPI Due Tuesday as Fed Rate-Hike Odds and Gasoline Draw Focus
Reuters and Bloomberg said markets await October CPI, with swaps pricing a likely December Fed hike after a September increase tied to the oil surge.
What happened
Reuters reported that U.S. consumer prices likely rose at a moderate pace in October, but that inflation probably stayed high enough to keep the Federal Reserve on track to raise rates next month. The Bureau of Labor Statistics releases the October consumer price index on Tuesday, Nov. 10, at 8:30 a.m. ET (5:30 a.m. PT). Reuters and CNBC both noted that no year-over-year readings will be published for this report, because the 2025 government shutdown prevented collection of October 2025 price data.
Bloomberg reported that the Fed raised rates in September, its first increase since 2023, after an oil price surge tied to the U.S. war against Iran, and that Fed officials held rates steady last month while signaling patience before any further hikes. Reuters put the benchmark overnight rate at 3.75%–4.00%.
Why traders watch it
Reuters said the expected slowdown in monthly inflation mainly reflects lower gasoline prices. According to the Energy Information Administration, retail gasoline fell 0.9% from September before seasonal adjustment; economists expect a small seasonally adjusted increase after a 9.1% surge in September. Reuters added that the war with Iran raised oil prices, which along with tariffs from last year has increased the cost of living.
Economists polled by Reuters expect headline CPI to rise 0.3% in October and core CPI, which excludes food and energy, to rise 0.2%, after 0.6% and 0.3% in September. CNBC reported that economists polled by Dow Jones have the same forecasts. Reuters said annual inflation was 3.7% in September, well above the Fed's 2% target.
Market reaction
| Item | Level | Basis (source) |
|---|---|---|
| Fed December hike pricing | More than 80% | Swap-market chance of a quarter-point hike (Bloomberg) |
| Fed December hike pricing | About 85% | Late Monday, market-implied chance of a hike (Reuters) |
| 10-year Treasury yield | 4.88% | Monday; still below the levels above 5% reached last month (Bloomberg) |
| Dow Jones Industrial Average | Up 1,104 points | Monday session (CNBC) |
| Brent crude | Down 5.85% | Settlement on Monday, the previous session (Reuters) |
Reuters reported that stocks rallied on Monday as oil prices fell, after U.S. stocks dropped the previous week when the Democratic midterm victory raised fears about new AI regulations. Bloomberg said Treasury yields across the curve fell last week to their lowest since September.
Joseph Brusuelas, chief economist at RSM, told Reuters the data shows stubborn and sticky inflation, particularly in services, and that he expects a December hike. Scott Barnard of Westwood Management told Bloomberg that a relatively hot inflation print could bring rate hikes back into focus sooner.
What to watch next
The October CPI report is due at 5:30 a.m. PT on Tuesday, Nov. 10. Reuters noted that the missing year-over-year data does not affect the PCE price index that the Fed tracks, and that both inflation measures are running above 3%. Reuters and Bloomberg both pointed to the Fed's December meeting as the next decision point on rates.
