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Macro EconomyMedium•10 November 2026•
4 min read

U.S. Inflation Rises 0.4% in October, Exceeding Forecasts and Reviving Rate-Hike Bets

Key Facts

1The Consumer Price Index rose 0.4% in October, after a 0.6% increase in September.
2The index excluding food and energy rose 0.3% in October, the same increase as in September and August.
3Shelter accounted for more than 30% of the monthly increase in the headline index, with its index rising 0.3%.
4Futures priced an 85% probability of a 25-basis-point rate hike in December and a 15% probability of a 50-basis-point hike.
5The October Producer Price Index will be released on November 13, 2026, at 8:30 a.m. Eastern time.

The U.S. Consumer Price Index rose 0.4% month over month in October, exceeding expectations for a 0.3% increase, according to data from the U.S. Bureau of Labor Statistics and a Reuters survey cited by the Associated Press. The reading followed a 0.6% rise in September, meaning the pace of monthly gains slowed while inflation remained above expectations. Data released on November 10 showed that the core index, which excludes food and energy, rose 0.3% during the month. That was the same monthly increase recorded by the core index in both September and August. The upside surprise brought concerns about tighter monetary policy back to the forefront of trading as investors watched what price pressures might mean for the Federal Reserve’s next decision.

Shelter accounted for more than 30% of the monthly increase in the headline index, with its index rising 0.3% in October, according to the Bureau of Labor Statistics. The food index also rose 0.5%, while the energy index increased 0.7%, with all three components posting gains of varying sizes during the month. In everyday purchases, grocery prices rose 0.4% from September, according to the Associated Press. The gasoline index increased 1.0%, while prices for used cars and trucks fell 1.2% after rising 0.7% in September. The communications index declined 0.1% during the month, showing that index components moved in different directions rather than prices following a uniform trend.

The Bureau of Labor Statistics did not publish October’s annual inflation rate because October 2025 data were not collected during the government funding shutdown, according to the Associated Press. The latest available year-over-year comparison was in the September data, when the all-items index rose 3.7% in the 12 months through that month, compared with 3.4% in the period through August. The index excluding food and energy rose 2.6% year over year in September, after 2.4% in August. These figures apply to September and August and do not represent October’s annual inflation rate. The published October reading therefore focuses on monthly changes in the headline and core indexes and their components.

Markets reacted to the price report with U.S. stocks falling in early trading on Tuesday; the S&P 500 declined 0.7% and the Nasdaq fell 0.8%, according to the Associated Press. The agency said the 10-year Treasury yield rose in that trading to 4.99% from 4.88% at Monday’s close. In another account of bond-market moves after the data release, Reuters, via Investing.com, reported that the two-year yield climbed 13 basis points to 4.68%, while the 10-year yield rose 7.6 basis points to 4.94%. CME FedWatch data cited by Reuters showed futures pricing an 85% probability of a 25-basis-point rate hike in December. They also showed a 15% probability of a larger 50-basis-point increase, reflecting traders’ bets after the reading.

At its October meeting, the Federal Reserve left monetary policy unchanged, but Lisa Cook and Beth Hammack preferred to raise the target range for the interest rate by a quarter of a percentage point, according to the central bank’s statement. Fed Governor Christopher Waller said on November 10 that inflation "remains higher than it should be" and that he would explain why he believes further monetary tightening will be needed "sooner rather than later." Waller linked that tightening to returning inflation to a path that would bring it to the bank’s 2% goal over the medium term. The Associated Press had quoted Waller as saying that a half-point increase in December was possible. The agency said persistent high inflation makes a rate hike at the next meeting likely, while futures probabilities reflect markets weighing two potential sizes for the increase.

The Bureau of Labor Statistics will release the October Producer Price Index on November 13, 2026, at 8:30 a.m. Eastern time, according to the official release schedule. The bureau did not provide a forecast for the index’s change. The November Consumer Price Index is scheduled for release on December 10, 2026, at 8:30 a.m. Eastern time. The releases will follow October’s reading, which showed monthly increases in the headline and core indexes, while October’s annual rate remained unpublished. The upcoming release dates put new price data before investors and policymakers in the weeks following October’s report.