Dollar Rises 0.51% After Core Inflation Holds at 0.3% for Third Month
Key Facts
The dollar index rose 0.51% to 102.20 on November 10, 2026, after data showed U.S. core inflation remained at 0.3% month over month in October, according to Reuters via MarketScreener. The reading was above the consensus forecast of 0.2%, leaving the monthly pace at the same level for the third consecutive month. The two-year Treasury yield, which is most sensitive to interest-rate expectations, climbed 19.07 basis points to 4.738%. The moves reflected investors pricing in the possibility of tighter monetary policy at the Federal Reserve’s next meeting. After the data, the odds of a December rate hike reached 89%, according to CME’s FedWatch tool, as reported by Reuters.
The core Consumer Price Index excludes food and energy, components whose prices are described as volatile, and is used to measure underlying inflation. It rose 0.3% in October from a month earlier, compared with the consensus forecast of 0.2%, holding at 0.3% for a third month. The comparison matters for assessing the price trajectory monitored by monetary policymakers, as the result came in above expectations and showed no slowdown from the previous two months in the core reading data. But year-over-year comparisons for some series were unavailable for October 2026. The Bureau of Labor Statistics said it did not collect survey data for October 2025 because of a lapse in appropriations, preventing it from publishing annual changes for those series.
The inflation reading came on a day when Federal Reserve Governor Christopher Waller discussed the rate outlook, Reuters reported. Waller said a core inflation reading of 0.3% for October would lead him to consider an increase of half a percentage point at the December meeting scheduled for the 8th and 9th of the month. In remarks published on the Federal Reserve’s website, he said core inflation near 0.3% or higher could warrant a stronger move, and that a 50-basis-point increase should be under consideration in that case. Waller said the remarks represented his personal view. Markets linked the monthly reading to expectations for the next decision, pricing in an 89% chance of a December rate hike, according to FedWatch, as reported by Reuters.
The market response showed a rapid shift from price data to indicators of monetary-policy expectations. The dollar index rose to 102.20, recording daily gains of 0.51%, while the two-year yield climbed to 4.738% after rising 19.07 basis points. Reuters noted that the two-year Treasury yield typically moves in line with expectations for the interest rates set by the Federal Reserve. This coincided with markets pricing in an 89% chance of a December rate hike, according to CME’s FedWatch tool. These market expectations come ahead of the Federal Open Market Committee meeting scheduled for December 8 and 9.
Attention is turning to the October Producer Price Index, which the Bureau of Labor Statistics is scheduled to publish on November 13, 2026, at 8:30 a.m. Eastern time. The release follows the Consumer Price Index reading, which kept core inflation at 0.3% for a third month and came in above the consensus forecast of 0.2%. The Federal Reserve will then hold its next meeting on December 8 and 9, according to the calendar published on the board’s website. Waller had said a core reading of 0.3% or higher could lead him to consider an increase of 50 basis points at that meeting, while emphasizing that his position was a personal view. After the October data, markets priced in an 89% chance of a December rate hike.