Macro
Fed Hike Bets Build as Governor Waller Backs a December Increase Ahead of the October CPI Report
Traders price a quarter-point move on Dec. 9, and a hot inflation reading could put a half-point on the table.
By Noris Ortiz ·
Expectations for a Federal Reserve interest rate increase next month hardened on Tuesday, Nov. 10, as Governor Christopher Waller said he favors a December hike and traders waited for the October consumer price index, due at 8:30 a.m. ET.
According to CoinDesk, markets were pricing 25 basis points of tightening at the Fed's Dec. 9 meeting, which would lift the central bank's target range to 4.00% to 4.25% [1]. CoinDesk reported that Waller said he favored a higher rate even if inflation cooled last month, and that a hotter-than-expected reading could warrant a 50 basis point increase [1]. The outlet characterized his remarks in paraphrase rather than direct quotation.
The CME FedWatch tool showed an 82.2% chance of a hike next month, up from 74% a week earlier, Reuters reported, tying the shift to a strong October jobs report [2]. Yahoo Finance's market blog put the odds above 80% as well [3].
The inflation data itself is unusual. Because a government shutdown last year prevented the collection of prices, annual comparisons for the October report will not be available in the usual form, CoinDesk reported [1]. Attention will therefore fall on the monthly figures. A Reuters survey of economists points to a rise of about 0.3% in October after a 0.6% gain in September [4]. CoinDesk, citing a Dow Jones poll, said economists expect core prices, which exclude food and energy, to rise 0.2%, compared with 0.3% in September [5].
The reaction in markets so far has been measured. The two-year Treasury yield, which tends to track expectations for Fed policy, rose 3.3 basis points to 4.58%, according to Reuters [2]. In crypto, bitcoin fell just over 1% to about $74,200 and gold slipped below $4,100 an ounce, CoinDesk reported, while the dollar index held firm below 102 [1]. U.S. stock futures were roughly flat after Monday's rally, with S&P 500 E-minis up 0.17% at 5:01 a.m. ET, Reuters said [4].
The stakes are high for equities. The S&P 500 had its best day since April on Monday after a rough week, and analysts told Reuters that a hotter-than-expected inflation reading could threaten the recovery in stocks [4]. Falling oil offers some relief for the inflation outlook: Brent fell below $90 a barrel on Tuesday, its first close below that level since August, Reuters reported [4].
One governor does not set policy, and a December move would need broader support on the Federal Open Market Committee. Market-implied odds are also only a snapshot that can change within minutes of a data release.
What to watch: the headline and core monthly CPI readings at 8:30 a.m. ET and how they compare with the 0.3% and 0.2% forecasts; the response in the two-year yield and FedWatch odds, including any increase in the probability of a 50 basis point move; and further remarks from Fed officials before the Dec. 9 meeting.
Sources:
[1] CoinDesk, "Bitcoin slips before U.S. inflation report as traders price in Fed rate increase", November 10, 2026. https://www.coindesk.com/markets/2026/11/10/bitcoin-slips-before-u-s-inflation-report-as-traders-price-in-fed-rate-increase
[2] Reuters (via Euronext), "Stocks climb as oil prices dip heading into US CPI print", November 10, 2026. https://live.euronext.com/en/financial-news/stocks-climb-oil-prices-dip-heading-us-cpi-print
[3] Yahoo Finance, "Stock market today: Dow, S&P 500, Nasdaq trade mixed ahead of key inflation data", November 10, 2026. https://finance.yahoo.com/markets/live/stock-market-today-tuesday-november-10-dow-sp-500-nasdaq-inflation-data-cpi-090627830.html
[4] Reuters (via Yahoo Finance), "S&P 500, Dow futures climb as oil slide lifts sentiment", November 10, 2026. https://finance.yahoo.com/markets/stocks/articles/p-500-dow-futures-climb-102635174.html
[5] CoinDesk, "Bitcoin (BTC) price slips as ETF outflows mount ahead of U.S. CPI data: Crypto Markets Today", November 10, 2026. https://www.coindesk.com/markets/2026/11/10/bitcoin-lags-stock-rebound-in-advance-of-u-s-inflation-report
This article was produced with AI assistance. It is for informational purposes only and is not financial advice. StockVolt and its authors may hold positions in securities mentioned.