The October consumer price index rose 0.4%, while core prices gained 0.3%, both outpacing Dow Jones economist forecasts. These figures landed alongside last week's robust jobs report, which showed employers added 165,000 positions to the economy. In response, Federal Reserve Governor Christopher Waller indicated he would weigh a 50 basis point hike for December rather than the standard move.
Key points
Federal Reserve Governor Christopher Waller noted he would support considering a 50 basis…: Federal Reserve Governor Christopher Waller noted he would support considering a 50 basis point rate increase in December.
Strong labor and inflation reports are prompting analysts to consider whether rate increa…: Strong labor and inflation reports are prompting analysts to consider whether rate increases could extend into 2027.
Markets had already largely priced in a smaller 25 basis point rate hike prior to the lat…: Markets had already largely priced in a smaller 25 basis point rate hike prior to the latest economic reports.
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Treasury yields jumped on Tuesday after the U.S. consumer price index data for October came in hotter than expected.
The yield on the 2-year Treasury note, which more closely follows short-term Fed rate decisions, added more than 20 basis points to 4.755%. The yield on the 10-year Treasury note — the benchmark for mortgages, car loans and credit card rates — climbed more than 14 basis points to 5.004%. The 30-year Treasury bond yield, more sensitive to geopolitical developments, rose more than 10 basis points at 5.364%.
The 10-year yield last traded above the 5% level earlier this month. Back in October, the 10-year and 30-year yields hit fresh 24-year highs.
One basis point equals 0.01% or 1/100th of 1%, and yields and prices move inversely to one another.
The consumer price index for October grew 0.4%, more than the 0.3% expected from economists polled by Dow Jones and down from the 0.6% growth in September.
Core CPI, which excludes volatile food and energy prices, gained 0.3%. Economists had expected a 0.2% gain on the month. The reading was in…
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