EL7.AI
ForexMedium•10 November 2026•
5 min read

U.S. Inflation Rises 0.4% in October, Lifting the Dollar

Key Facts

1The consumer price index rose 0.4% in October, compared with 0.6% in September and a 0.3% forecast.
2Core inflation rose 0.3% in October, matching September and exceeding the 0.2% forecast.
3The dollar index rose 0.3% to 102.05, and the two-year Treasury yield climbed 13 basis points to 4.68%.
4Markets priced in an approximately 85% probability of a 25-basis-point rate increase in December.

The U.S. consumer price index rose 0.4% in October, after a 0.6% increase in September, exceeding the 0.3% forecast in a Reuters poll, Reuters reported via Investing.com on November 10, 2026. The stronger-than-expected reading brought the interest-rate path into focus ahead of the Federal Reserve’s next meeting. The dollar index rose 0.3% to 102.05 after the data were released, while U.S. bond yields climbed. This came as underlying price pressures remained elevated, despite a slowdown in headline inflation from the previous month. Futures priced in a high probability of a rate increase in December, but no decision had yet been announced.

The core consumer price index, which excludes food and energy, rose 0.3% in October, the same increase recorded in September, Reuters reported. Expectations had pointed to a smaller 0.2% rise, leaving the core reading above forecasts as well. The comparison helps show that the headline index’s slowdown from 0.6% to 0.4% was not accompanied by a similar easing in the core index. The unadjusted level of the consumer price index for all urban consumers was 337.511 in October, according to the U.S. Bureau of Labor Statistics. On a monthly basis, the index rose 0.2% before seasonal adjustment, a reading that differs from the seasonally adjusted 0.4% increase Reuters used in its monthly comparison.

The Bureau of Labor Statistics did not publish the year-over-year rate of change for most October indexes after it was unable to collect October 2025 data because of a lapse in government appropriations, the agency said in a statement. The agency said, "The Bureau of Labor Statistics did not collect survey data for October 2025 because of a lapse in appropriations." The absence of an annual comparison base limited the October reading to monthly data and available indicators, rather than showing a comparable annual rate for most items. September data had shown annual inflation rising to 3.7%, compared with the Federal Reserve’s 2% target, Reuters reported. EL7 data released on October 14 also showed an annual reading of 3.7%, compared with a 3.6% forecast and a previous reading of 3.4%.

The price report quickly rippled through bond and currency markets, with the yield on the two-year U.S. Treasury, which is more sensitive to interest-rate expectations, jumping 13 basis points to 4.68%, Reuters reported. The 10-year Treasury yield rose 7.6 basis points to 4.94%. In equities, futures tied to the Nasdaq fell 1.4%, while S&P 500 futures dropped 0.8% after the data. The moves showed the reaction spreading from currency and bond markets to equity futures in the November 10 session. The article did not provide a figure for moves in regional markets.

According to FedWatch data cited by Reuters, futures priced in an approximately 85% probability of a 25-basis-point rate increase at the December meeting and a 15% probability of a larger 50-basis-point increase. Before the inflation data were released on November 10, Federal Reserve Governor Christopher Waller said he would support a 25-basis-point increase at the December meeting even if inflation improved from September. Waller said, "Even if that happens, I would still support a 25-basis-point increase in the policy rate set by the Federal Open Market Committee at the December meeting." This places the official’s remarks before the data alongside market pricing after its release, with the decision still in the committee’s hands. Expectations for tighter policy are reflected in higher bond yields, particularly the two-year yield, which rose 13 basis points in the session.

Reuters attributed persistently high living costs to factors including rising oil prices amid the U.S.-Israeli war with Iran, alongside U.S. tariffs imposed by the Trump administration in the previous year. It noted that annual inflation reached 3.7% in September, above the Federal Reserve’s 2% target. This background provides context for the October reading, but does not change the fact that the monthly comparison showed headline inflation slowing from September while core inflation held at 0.3%. The article did not specify how much oil or tariffs contributed to the October reading. The market reaction therefore remained tied to the monthly reading exceeding expectations and what it could mean for rate pricing, alongside the continued pressures on living costs.

Attention now turns to the October producer price index report, scheduled for release on November 13, 2026, at 8:30 a.m. Eastern time, according to the Bureau of Labor Statistics. The report follows the consumer price data among the next economic releases on the official schedule. The November consumer price index report is scheduled for publication on December 10, 2026, at 8:30 a.m. Eastern time. The Federal Reserve will hold its next meeting on December 8 and 9, with a news conference scheduled for December 9. Those releases will come before the committee meeting or in the period leading up to it, while market bets on the size of a potential increase remain futures pricing, not an announced Fed decision.