Fed officials weigh faster rate hikes as inflation spreads beyond tariffs and energy

U.S. inflation accelerated to 4% in October, up from 3.7% in September, signaling price increases are spreading beyond tariffs and energy shocks into the broader economy, prompting Federal Reserve officials to consider faster interest rate hikes that would make borrowing more expensive for consumers. Two Fed officials, including Dallas Fed President Lorie Logan, suggested Tuesday the central bank may need to move more quickly, with Logan supporting two additional quarter-point hikes and possibly faster action this winter. Wall Street now sees 90% odds of a rate increase at the Fed's December 8-9 meeting, with expectations for a second hike in January tripling to over 64%. The inflation report showed rising costs in areas unrelated to energy or AI investment, including streaming services, beef, and auto insurance, while smartphone prices posted their largest monthly jump on record. Fed officials remain divided on pace, with Philadelphia Fed President Anna Paulson supporting only gradual increases despite acknowledging underlying inflation remains above target.