Dollar Rises 0.2% to 102.4 as Markets Price in 25-Basis-Point Rate Hike

Key Facts

The dollar rose against most currencies on Wednesday, November 11, extending gains after inflation data and comments from Federal Reserve officials the previous day, according to a Reuters report. The dollar index gained 0.2% to 102.4, nearing a high not reached in about two weeks. The move followed a 0.5% rise in the index on Tuesday, when October data showed a third consecutive upside inflation surprise. But market pricing did not shift to a base-case bet on a large rate increase. Reuters reported that traders had fully priced in a 25-basis-point hike in December, with only a slight chance of a 50-basis-point increase.

Data from the Bureau of Labor Statistics showed the seasonally adjusted U.S. Consumer Price Index rose 0.4% in October, after a 0.6% increase in September. The core index, excluding food and energy, rose 0.3% during the month, the same rate recorded in September and August. The reading highlights continued monthly increases in core prices, even as the headline index slowed from the previous month. On a not seasonally adjusted basis, the CPI stood at 337.511, based on 1982–84=100. The bureau did not publish the annual change in the October index because October 2025 data were not collected during a lapse in government appropriations, preventing the year-over-year comparison for this series.

Monthly increases were spread across major components of the price basket. The food index rose 0.5% in October after holding steady in September, while the energy index increased 0.7%, following a 5.2% jump in the previous month. The shelter index rose 0.3%, accounting for more than 30% of the monthly increase in the headline index. These components show that October’s reading included pressure from food, energy and housing, alongside an increase in the core index. On a year-over-year basis, the September reading available before the October annual change could be published showed the headline index up 3.7% and the core index up 2.6% over 12 months.

The data coincided with debate inside the Federal Reserve over the size of its next move. Governor Christopher Waller said before the October data were released that he leaned toward supporting a 25-basis-point increase at the December meeting, but said core inflation at 0.3% or higher could warrant considering a 50-basis-point hike. He said he was “leaning toward supporting a 25-basis-point increase in the policy rate at the December meeting,” adding that a core reading “around 0.3% or higher” could justify discussing a 50-basis-point increase. Waller also cited September personal consumption expenditures data: the headline index rose 0.5% monthly and 3.7% over 12 months, while the core index increased 0.3% monthly and 3.1% annually. The Fed governor said a half-percentage-point increase next month was “possible,” double the usual quarter-point move.

Moves in major currencies reflected continued demand for the dollar during Wednesday’s session. It rose to 158.88 yen from 158.70 the previous day, while the euro slipped to $1.1150 from $1.1171, according to data reported by the Associated Press. These moves put the dollar’s performance against the yen and euro in the context of a broader index advance, with gains recorded in two consecutive sessions. Tuesday’s rise followed the release of October data, and gains extended the next day as investors tracked Fed signals on rates. The data provided no additional figures for other currencies’ moves during Wednesday’s session.

Attention is turning to price indicators and comments from Federal Reserve officials ahead of the December meeting. The October Producer Price Index is scheduled for release on Friday, November 13; U.S. Bank’s economics research team forecast a 0.4% monthly rise in the headline index, after September’s 1.3% increase, and a 0.3% increase in the core index, following 0.7% in September. The Federal Reserve Board calendar also lists a speech by Vice Chair for Supervision Michelle Bowman on November 12 at 6:30 p.m. Eastern Time, at a virtual event titled “The Economic Outlook.” The Bureau of Labor Statistics has scheduled the November Consumer Price Index report for release on December 10 at 8:30 a.m. Eastern Time. Investors will follow these dates for new data and remarks in the period before the December meeting.