Latest: The selloff extended into the afternoon and the 10 year Treasury yield crossed 5 percent, trading at 5.004 percent, up more than 14 basis points on the day, CNBC reported. The two year yield rose more than 19 basis points to 4.748 percent and the 30 year yield rose more than 11 basis points to 5.367 percent. The 10 year last traded above 5 percent earlier in November, and a December hike remains the market’s base case in CME FedWatch pricing cited by CNBC, with strategists now discussing whether stubborn inflation pushes further hikes into 2027.
Earlier: Treasury yields jumped after the release. The two year yield climbed more than 15 basis points to 4.698 percent and the 10 year yield rose more than 7 basis points to 4.938 percent, CNBC reported, with the 30 year yield up more than 3 basis points at 5.29 percent. Markets had already largely priced in a 25 basis point December hike before the print, according to CME FedWatch data cited by CNBC, so the post-release move was concentrated at the front end, where a 50 basis point debate would be priced.
US consumer prices rose 0.4 percent in October on a seasonally adjusted basis, after a 0.6 percent increase in September, and prices excluding food and energy rose 0.3 percent, as they did in September and August, the Bureau of Labor Statistics reported on Tuesday. Both readings came in a tenth of a point above the consensus forecast, which looked for 0.3 percent on headline and 0.2 percent on core. A third consecutive core month at 0.3 percent is a run rate near 3.7 percent annualised, well above the Federal Reserve’s 2 percent goal, and it arrived with no softening in the components the Fed watches most closely.
Shelter rose 0.3 percent and accounted for over thirty percent of the monthly all items increase, with owners’ equivalent rent up 0.3 percent and rent up 0.2 percent. Food rose 0.5 percent, with food at home up 0.4 percent and food away from home up 0.5 percent. Energy rose 0.7 percent after September’s 5.2 percent jump, as gasoline rose 1.0 percent on a seasonally adjusted basis and electricity rose 0.9 percent, while piped gas fell 0.8 percent. Used cars and trucks fell 1.2 percent, reversing September’s 0.7 percent rise, and communication fell 0.1 percent. Recreation rose 0.8 percent, motor vehicle insurance 0.7 percent, transportation services 0.8 percent, and medical care 0.3 percent.
The release carries no official twelve month rate for the headline or core indexes. The Bureau did not collect survey data for October 2025 because of a lapse in appropriations, so it cannot publish twelve month percent changes for October 2026 for the indexes where the year ago data are unavailable. In Table A the twelve month column is blank for almost every series; gasoline, at 37.4 percent, new vehicles, at 0.7 percent, and used cars and trucks, at minus 3.3 percent, are the exceptions where a year ago index exists.
The print lands on a threshold named before it arrived. Governor Christopher Waller, in a speech published this morning and covered in full on this site, said he is leaning toward supporting a 25 basis point increase at the December meeting even if October inflation improved, and that if the October data repeated the recent pattern, with core inflation around 0.3 percent or higher, a stronger move should be considered, because hiking only 25 would put the Fed’s credibility at risk. Core printed at exactly 0.3 percent. Before the release, Waller’s remarks had already pushed money market pricing to a 98 percent probability of a 25 basis point December hike, up from 84 percent, according to LSEG data reported by Dow Jones, and the two year Treasury yield had risen 6.7 basis points to 4.613 percent on Tuesday morning, with the 10 year up 2.4 basis points to 4.885 percent, according to Tradeweb.
There is no further CPI report before the FOMC meets on December 8 to 9: the Bureau has scheduled the November release for Thursday December 10, the day after the meeting ends. The committee will have the November employment report, due December 4, and little else of this weight. The next market test comes sooner, at 1:00 p.m. today, when the Treasury sells 42 billion dollars of 10 year notes into a front end that is now debating 50.