NEW YORK, Nov. 10 (Xinhua) -- U.S. consumer prices rose more than expected in October as core inflation remained firm for a third consecutive month, stoking concerns that price pressures are broadening and sending short-term Treasury yields sharply higher, according to official data published Tuesday.
The consumer price index (CPI) rose 0.4 percent in October after climbing 0.6 percent in September, the U.S. Bureau of Labor Statistics reported, exceeding the 0.3 percent economists had expected.
The core index, which excludes food and energy, rose 0.3 percent, putting core inflation on an annualized pace of roughly 3.6 percent, well above the Federal Reserve's 2 percent target. Shelter costs also increased 0.3 percent, accounting for more than 30 percent of the overall monthly increase.
The report came after Fed Governor Christopher Waller spoke in London overnight, saying that if core prices rose 0.3 percent or more, "a stronger policy move may be needed," and that a 50-basis-point rate hike should be considered at the Fed's Dec. 8-9 meeting.
Bond markets sold off following the release of the CPI data. The two-year Treasury yield surged about 15 basis points to above 4.7 percent, marking its biggest single-day increase since early April 2025, while the 10-year yield climbed to about 4.93 percent.
Markets are now pricing in an almost certain rate hike in December, with the probability of a half-percentage-point increase rising to nearly 15 percent.
Christopher Hodge, chief U.S. economist at Natixis North America, said a third straight core inflation reading rounding to 0.3 percent is an "unacceptable pace for the Fed," and that with inflation remaining sticky rather than reaccelerating, "50bps is squarely on the table for the Fed in December."
"Even if markets are pricing 25 for December, if the November print is high, that could be a good time for a surprise jumbo hike," he said.
Meanwhile, James McCann, senior economist at Edward Jones, said the report most likely seals the deal on a hike to close the year, but a quarter-point increase remains the most likely outcome as oil prices ease. ■
