Hot Inflation Prompts Fed to Weigh Half-Point Hike

October inflation came in hotter than expected, with consumer prices rising 0.4% from September and core prices up 0.3% for a third consecutive month. Before the report, Federal Reserve Governor Christopher Waller said a core reading of 0.3% or higher would put a half-percentage-point increase on the table at the Fed’s December meeting, though he had been leaning toward a quarter-point hike. The data and Waller’s comments drove a bond-market selloff and raised the perceived odds of a larger increase, while Dallas Fed President Lorie Logan also said rates may need to rise further and potentially at a faster pace. Higher rates could increase borrowing costs for households and businesses and weigh on investment, including in commercial real estate and cryptocurrencies; President Donald Trump has meanwhile called for lower rates.