The Bureau of Labor Statistics said on Tuesday, November 10, 2026, that the consumer price index rose 0.4% in October, seasonally adjusted, after a 0.6% increase in September. Core prices — the index excluding food and energy — rose 0.3%.
That second number is the one the Federal Reserve had told markets to watch.
The condition Waller set
Speaking the same day at the Bank of England Watchers Conference in London, Fed Governor Christopher Waller said his baseline for the December 8-9 meeting of the Federal Open Market Committee was a quarter-point increase — but that a half-point move should be considered if October core CPI came in around 0.3% or higher, the pace of the previous two months.
It came in at exactly 0.3%.
Waller framed the larger move as a question of the Fed's word rather than of arithmetic. "Hiking only 25 basis points would put our credibility at risk, a risk I am not eager to take," he said, adding that if inflation ran substantially hotter than expected, "more robust action by the FOMC may be called for." He also said that "further tightening of monetary policy will be needed, sooner rather than later."
Still no annual rate
For a second straight month, the BLS could not publish a 12-month change for the all-items index. The agency did not collect October 2025 survey data during the lapse in appropriations that closed much of the federal government, and it will not publish year-over-year comparisons for indexes missing that month.
The only 12-month figures in the release are unadjusted: gasoline up 37.4%, new vehicles up 0.7%, and used cars and trucks down 3.3%. The absence of a headline annual rate leaves the monthly prints — and the Fed's own preferred gauge — carrying the whole argument. Waller cited PCE inflation of 3.7% over the 12 months through September, with core PCE at 3.1%, against the central bank's 2% target.
What moved in October
Energy prices rose 0.7% after jumping 5.2% in September, and that deceleration is most of the reason the headline figure was not worse. Food rose 0.5%, with groceries up 0.4% and restaurant prices up 0.5%. Shelter, the largest single component of the index, rose 0.3%. Gasoline rose 1.0% seasonally adjusted, though before adjustment it fell 0.7% on the month.
Waller pointed to energy as a pressure that may not fade quickly, citing shipping costs tied to the Strait of Hormuz and constrained diesel refining capacity, and said the pass-through could run into 2027. His broader worry was breadth: both core goods and core market-based services remain elevated.
Where the rate stands
The FOMC left its target range at 3.75% to 4% on October 28, in a 10-2 vote. Governor Lisa D. Cook and Beth M. Hammack of the Cleveland Fed dissented, both preferring a quarter-point increase. The committee had raised rates by a quarter point in September.
Dallas Fed President Lorie Logan, speaking the same day at an energy conference, went beyond Waller's baseline. The committee "needs to implement at least two more 25-basis-point rate increases," she said, arguing that "accommodative monetary policy is adding to inflationary pressures." She described a committee hitting only one of its two mandates: employment near its maximum, inflation well above target.
The market read
According to The National, CME Group data showed roughly 90% of traders expecting a quarter-point increase in December and about 10% pricing in a half point, which would be the Fed's largest single move since 2022. The 10-year Treasury yield returned to 5% and the two-year rose 19 basis points to about 4.74%. US stock indexes fell and the dollar gained.
The economy Waller described is not one that is cooling. He cited an initial estimate of 3.4% real GDP growth in the third quarter, driven by consumer spending and AI-related business investment, unemployment at 4.1% in October, and job gains averaging close to 80,000 a month over the past six and twelve months. He called the labor market "low hire, low fire" — stable, but with churn low enough that he said he worries about productivity, and without answers yet.
The November inflation reading is scheduled for December 10 — one day after the FOMC announces its decision.
Reporting from the Bureau of Labor Statistics, the Federal Reserve, The National and Kitco News.
