U.S. Prices Rise 0.4% in October, Beating Forecasts Before Fed Meeting

U.S. consumer prices rose 0.4% in October, more than the 0.3% economists expected, the Bureau of Labor Statistics said Tuesday at 8:30 a.m. ET. The Fed meets Dec. 8-9.

Core CPI, which leaves out food and energy, rose 0.3% against a 0.2% forecast, CNBC reported, citing a Dow Jones survey. Headline prices had climbed 0.6% in September.

Why one monthly number moved bonds

The consumer price index tracks what a fixed basket of goods and services costs from month to month. Economists watch the core reading more closely because gasoline and groceries swing hard. A 0.3% monthly pace, kept up for a year, works out to roughly 3.6%. The Fed targets 2%.

There is no annual figure this time. The government shutdown in October 2025 stopped the bureau from collecting enough data, so it had nothing to compare against, UPI and CNBC reported.

Food and shelter did the lifting

• Food rose 0.5%, with beef up 0.9%.
• Energy rose 0.7% and gasoline 1%, after gasoline's 9.1% jump in September.
• Shelter rose 0.3% and made up more than 30% of the increase, the bureau said.
• Used cars and trucks fell 1.2%.

Fed officials spoke on both sides of the release

Fed Governor Christopher Waller said in London before the data that a hot reading would put a half-point hike in play. "Hiking only 25 basis points would put our credibility at risk," he said, as CNBC reported. Dallas Fed President Lorie Logan said after the release that she sees a need for two more quarter-point increases.

Traders now fully price a quarter-point hike in December and put the odds of a half point at 13.6%, up from about zero before the report, per CME Group's FedWatch tool. The 10-year Treasury yield rose more than 14 basis points to 5.004%. The Fed's range sits at 3.75%-4%.

Bitcoin fell 2.8% over 24 hours to about $72,900 at 12:05 p.m. ET, per CoinGecko.

In our opinion: the shutdown took away the yearly number, but the monthly one did the talking anyway. Core has now printed 0.3% three months running, CNBC's breakdown shows, and Logan wants two more hikes. The next test is producer prices on Friday, then the PCE report later this month.