US inflation disappoints: the chance of a rate hike is almost certain

US inflation rose 0.4% in October, above the expected 0.3%, and core inflation also surprised to the upside. Interest rate futures show a 98% probability of a rate hike in the US in a month.

US inflation rose 0.4% in October, above the expected 0.3%, according to the Consumer Price Index data released by the Bureau of Labor Statistics. Core inflation, which excludes food and energy prices, also rose 0.3% – more than expected. The increase is particularly surprising given the drop in fuel prices in October, after a year of surges. Economists had hoped the decline would ease inflation, but other economic pressures remained strong. Due to the government shutdown last year, no annual inflation rate was published. This is the last inflation report before the Fed's rate decision in December. Following the data, interest rate futures show a 98% probability of a rate hike in the US in a month.

US inflation disappoints: the chance of a rate hike is almost certain