Fed rate hike fears grow as hot inflation hits global bond markets

Global bonds tumbled and the dollar stayed firm after a hotter-than-expected US inflation report and hawkish central bank comments raised the risk of a half-point Federal Reserve rate hike next month, though stocks remained resilient. US core inflation ran at 0.3% monthly in October, above the 0.2% forecast, prompting Fed Governor Christopher Waller to say such a reading would make him consider a 50-basis-point hike in December. Other Fed officials also signaled more tightening, with futures pricing a 10% chance of a larger move. Two-year Treasury yields surged 18 basis points overnight, with Asian bonds sold off. Goldman Sachs added a third rate hike to its forecast for March 2027, projecting a peak of 4.25-4.5%. The dollar gained 0.5%, while gold slid 2.6% to $4,030.56 an ounce.