Wall Street weighs October CPI: Hot inflation data boosts December rate hike odds

Wall Street reacted sharply to October U.S. consumer inflation data released Tuesday, which came in hotter than expected and prompted traders to nearly lock in a December rate hike, with some odds now favoring a larger half-point increase. Headline CPI rose 0.4% month-over-month, above the 0.3% forecast, while core CPI held at 0.3% versus a 0.2% expectation. Federal Reserve Governor Christopher Waller’s hawkish comments supported a 25 basis point hike, though he noted a 50 basis point move should be considered if price pressures persist. The data follows a strong jobs report, and markets fell with the S&P 500 down 0.7%. Analysts offered mixed views, with some seeing demand-driven inflation and others citing oil price impacts, while attention now turns to upcoming PPI and PCE readings.