CME's FedWatch tool puts a Fed rate hike at the December 9 meeting at near-certain odds.

CME's FedWatch tool puts a Fed rate hike at the December 9 meeting at near-certain odds. It took three Fed officials in one week to get there.

Governor Waller said Tuesday that a 50bp December hike should be considered if core CPI came in hot, and it did: October core CPI rose 0.3% against a 0.2% consensus. Dallas Fed President Logan said the same day that the FOMC needs at least two more quarter-point hikes and that a faster pace this winter may be possible.

Then on Thursday New York Fed President John Williams said: "Inflation is far too high and it continues to be high even in the latest data."

Williams is the one I'd pay attention to. He's a permanent FOMC voter and one of the most influential regional presidents, and he tends to sound measured. When he says "we still have work to do ... to get monetary policy to the right place," I read that as a committee lining up behind one message.

The bond market read it the same way. The 10-year jumped more than 13bps to above 5% on Thursday and the 2-year rose more than 15bps. This morning the 10-year sits at 5.127% and the 30-year at 5.460%, while the 2-year has eased slightly to 4.853%.

Right now the market splits roughly 87% for 25bp and 13% for 50bp. The next CPI report doesn't land until December 10, the day after the decision, so there's no fresh inflation print to rescue either side. The open question for me is how long that 13% stays small if more officials start sounding like Logan.

Sources:
Reuters: https://www.reuters.com/business/feds-williams-says-central-bank-has-work-do-get-inflation-back-target-2026-11-13/
CNBC: https://www.cnbc.com/2026/11/13/treasury-yields-fed-rates.html

Not financial advice. For informational and educational purposes only.