CPI Report Shows Core Prices Up 0.3% Again, Hitting Waller's Line for Weighing a Half Point Hike

Show the data

Category	Value
Jan	0.3%
Feb	0.2%
Mar	0.2%
Apr	0.4%
May	0.2%
Jun	0.0%
Jul	0.2%
Aug	0.3%
Sep	0.3%
Oct	0.3%

Sec.01What did the CPI report show today?

The Consumer Price Index rose 0.4% in October after BLS took out the usual seasonal swings, slower than the 0.6% of September, the Bureau of Labor Statistics reported at 8:30 a.m. ET. Economists polled by Dow Jones had expected 0.3%, CNBC reported before the release.

Core prices rose 0.3%, the same pace as in September. Economists polled by Dow Jones had expected 0.2%. BLS published no 12-month inflation rate for overall or core prices this month, for the reason explained below.

Core prices are the index without food and energy. Gas and grocery prices jump around from month to month, so economists and the Fed watch core prices for the trend.

Housing, food and energy all pushed prices up. The shelter index, which tracks housing costs, rose 0.3%. BLS said it accounted for "over thirty percent of the monthly all items increase." Food rose 0.5%, as grocery and restaurant prices both rose. Energy rose 0.7%.

Gasoline rose 1.0% in October, after a 9.1% jump in September. It is one of the few prices with a yearly figure this month: gasoline was up 37.4% from October 2025, before seasonal adjustment, BLS's Table A shows.

BLS named recreation, medical care, car insurance, household furnishings and education among the prices that rose. Used cars and trucks fell 1.2%, and communication prices also fell.

Sec.02What the CPI report means for a Fed rate hike in December

Christopher Waller, a governor of the Federal Reserve, the central bank that sets US interest rates, spoke in London a few hours before the report. He said that even if October looked better than September, "I am leaning toward supporting an increase in our policy rate of 25 basis points at the FOMC's December meeting." The FOMC is the Fed committee that sets rates. A basis point is one hundredth of a percentage point, so that is a quarter point rate hike.

Then he drew a line. He said "a stronger policy move may be needed" if the October CPI data were "similar to the past two monthly readings" with core CPI inflation "around 0.3 percent or even higher" in the month, according to the text the Fed posted. In that case, he said, "a 50 basis point hike in the policy rate should be considered at the December meeting." He said a quarter point alone would then "put our credibility at risk" and called that "a risk I am not eager to take." Earlier in the speech he explained why: the Fed's signals had already led markets to price in some tightening, and what matters is that those hikes are eventually carried out.

October's 0.3% meets that condition. It also follows 0.3% readings in August and September, the past two monthly readings Waller compared it with.

Waller is one voice on a committee of 12 voters. At the last meeting, on October 28, the Fed held its target range at 3.75% to 4%. Two officials, Lisa Cook and Beth Hammack, voted against that hold because they wanted a quarter point hike. The Fed had already raised its range by a quarter point on September 16. The next decision comes on December 9, at the end of a two day meeting. The November CPI report comes out on December 10, BLS's schedule shows, after that decision, so this is the last CPI report the Fed sees before it votes.

Sec.03How core inflation compares with recent months

Core prices rose 0.3% or more in five of the ten months of 2026: January, April, August, September and October. The other months were 0.2% or less, and June was flat. August, September and October are three months in a row at 0.3% or more.

A monthly change looks small, so it helps to stretch it over a year. Over the three months to October, core prices rose at a pace of about 3.7% a year. That is well above the 2.6% BLS published for core prices over the 12 months to September.

Waller also pointed to the Fed's preferred gauge, the personal consumption expenditures price index. He said core prices on that measure rose 3.1% over the year to September. "September's inflation data were bad. There was no silver lining," he said. The Fed's 2% goal is set on the overall version of that index, the Fed says.

Sec.04Why the CPI report has no yearly inflation rate

The federal government shut down from October 1 to November 12, 2025, and BLS stopped collecting prices. Its shutdown questions page says it "will not publish 12-month percent changes for October 2026 for indexes where October 2025 data are not available." That covers overall prices and core prices. A few series keep a yearly rate, because BLS later published October 2025 values for them. Gasoline has a published October 2025 value, so its yearly change still appears.

The last official yearly figures are September's: overall prices up 3.7% and core prices up 2.6% over 12 months. Some economists estimate a yearly figure by filling in the missing month, and StockTitan's preview of this report explains how that works. The yearly rate comes back with the November report on December 10, because BLS did collect November 2025 prices.

Sec.05How the CPI report affects the stock market

The Fed explains the link on its page on how monetary policy works. It says changes in interest rates "tend to affect stock prices by changing the relative attractiveness of equity as an investment." Lower rates "can make holding equities more attractive," it says. By the same logic, higher rates make stocks relatively less attractive.

So a CPI report can matter to stocks on the day it comes out when it changes what traders expect the Fed to do with rates.

Before the opening bell, the SPDR S&P 500 ETF Trust (SPY) traded at $750.15 at 8:38 a.m. ET, StockTitan's real-time Nasdaq data show. The Invesco QQQ Trust (QQQ), which tracks the Nasdaq 100, traded at $672.37 at the same time, 1.0% below its Monday close of $679.35. StockTitan's stock market live coverage for November 10 follows the moves through the day.

Sec.06Frequently asked questions