US inflation rises 0.4% in October as the Fed weighs a rate hike
Core prices rose 0.3%, the exact level Fed Governor Christopher Waller said would make him consider a half-point increase in December.
Consumer prices in the United States rose 0.4% in October 2026 from September, seasonally adjusted, the Bureau of Labor Statistics reported Tuesday in its consumer price index, the main gauge of what households pay for goods and services. Core prices, which leave out food and energy, rose 0.3%.
That number matters because of what Federal Reserve Governor Christopher Waller said hours earlier in a speech in London. A 50 basis point increase should be considered in December, he said, if core inflation held "around 0.3 percent or even higher." He added that he would still back a 25 basis point rise at minimum.
Energy prices climbed 0.7% on the month, with gasoline up 1.0% and electricity up 0.9%, while natural gas fell 0.8%. Food rose 0.5%. In September, the overall index had gained 0.6%.
| Category | Change |
|---|---|
| All items | 0.4% |
| Core | 0.3% |
| Energy | 0.7% |
| Food | 0.5% |
| Used cars | -1.2% |
There is no year-over-year figure for October. The bureau did not collect prices in October 2025 because of a lapse in federal funding, so it cannot publish annual changes for indexes missing that base. The last annual comparison is September's: 3.7% overall and 2.6% core.
What comes next at the Fed
The federal funds rate sits in a range of 3.75% to 4.00% after a quarter-point increase on Sept. 17. At its Oct. 28 meeting, the committee held rates steady, with ten votes in favor and two against. Lisa Cook and Beth Hammack wanted another quarter-point hike.
For Mexico, a higher U.S. rate narrows the yield advantage of peso assets, which tends to put pressure on the exchange rate and weighs on Banxico's decisions.
The Fed decides Dec. 9. The November price index comes out a day later, on Dec. 10, so the committee will vote without it.
