Macro
Fed Officials Line Up Behind More Rate Hikes After a Firm October CPI, With a December 8-9 Decision Ahead
Collins says the direction of policy is clear, and traders expect a quarter-point hike next month, with a larger move still possible.
By Emma Cruz ·
The Bureau of Labor Statistics said on Tuesday, Nov. 10, that the consumer price index rose 0.4% in October on a seasonally adjusted basis, after a 0.6% increase in September [1]. Core prices, which exclude food and energy, rose 0.3%, the same pace as in September and August [1]. Energy climbed 0.7% after a 5.2% jump the month before, shelter rose 0.3% and food rose 0.5% [1]. The agency did not publish a 12-month change for the headline index because October 2025 data were not collected during a lapse in appropriations [1].
That report landed at a Federal Reserve already leaning toward tighter policy. At its Oct. 28 meeting the Fed left its target range at 3.75% to 4% on a 10-2 vote, with Lisa Cook and Beth Hammack preferring a quarter-point increase [2]. The statement said "Inflation remains elevated" [2].
Since then, officials have kept pointing in one direction. Reuters reported on Friday, Nov. 13, that Collins, a Fed policymaker, told Bloomberg Television that more rate hikes are coming. "I think it's clear the direction that monetary policy needs to go," she said [3]. Collins described recent inflation data as not friendly and said it shows price pressures spreading through the economy, though she added that she does not want to get ahead of the debate over how high or how fast rates should rise [3].
She was not alone. Reuters reported on Nov. 6 that San Francisco Fed President Mary Daly said she expects the Fed will need to tighten further, while stressing that the timing and size of any move remain unclear and that the central bank should proceed deliberately and gradually [4]. Earlier this week, Fed Governor Christopher Waller raised the possibility of a half-point move, according to Reuters [3].
Markets have adjusted accordingly. Reuters said traders and investors expect a quarter-point hike at the Dec. 8-9 meeting and another in January [3]. CoinDesk reported on Friday that the CME FedWatch tool showed an 88% chance of a quarter-point increase in December and a 12% chance of a half-point move [5]. The U.S. Dollar Index rose above 103 that day, its highest level since April 2025, and bitcoin fell below $70,000 for the first time since August, according to the same report [5]. Reuters separately reported that the dollar reached a 19-month high against major peers as Treasury yields rose on bets of a larger Fed hike next month, which helped push the Japanese yen back past 160 per dollar [6].
For markets, the significance is that the debate has shifted from whether the Fed will raise rates to how quickly. Higher policy rates raise borrowing costs across the economy and have tended to support the dollar, and the reaction this week in currencies and crypto shows how sensitive assets have become to each new inflation reading and Fed comment.
Several open questions remain. The missing 12-month comparison for October means analysts have less of a clean yearly gauge to lean on, and the Fed's next decision will come with whatever data arrives before Dec. 8-9. Officials have so far differed in tone on pace, with Daly and Collins emphasizing a careful, gradual approach while Waller has left a larger step on the table. Investors will be watching for further remarks from policymakers and any shift in futures pricing between a quarter-point and a half-point increase.
Sources:
[1] U.S. Bureau of Labor Statistics, "Consumer Price Index Summary - 2026 M10 Results", November 10, 2026. https://www.bls.gov/news.release/cpi.nr0.htm
[2] Federal Reserve Board, "Federal Reserve issues FOMC statement", October 28, 2026. https://www.federalreserve.gov/newsevents/pressreleases/monetary20261028a.htm
[3] Reuters (via Yahoo Finance), "Fed's Collins says more rate hikes are coming, Bloomberg Television reports", November 13, 2026. https://finance.yahoo.com/economy/policy/articles/feds-collins-says-more-rate-163318090.html
[4] Reuters (via Yahoo Finance), "Daly says Fed rate hike likely, despite 'painful' tech-stock dive", November 6, 2026. https://finance.yahoo.com/economy/policy/articles/daly-says-fed-rate-hike-183207313.html
[5] CoinDesk, "Bitcoin falls below $70,000 as dollar surges and $1.6 billion liquidated", November 13, 2026. https://www.coindesk.com/markets/2026/11/13/bitcoin-hits-12-week-low-as-dollar-rallies-on-interest-rate-outlook-liquidations-top-usd1-6-billion
[6] Reuters (via 104.9 The Wolf), "Limited US role in Japan intervention undermines deterrent as yen touches 160", November 13, 2026. https://www.1049thewolf.com/2026/11/12/japans-finance-minister-vows-action-as-yen-breaches-160-threshold/
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.