This morning Fed Governor Christopher Waller set a bar in London: if October core CPI came in around 0.3% or higher, a 50 basis point…

This morning Fed Governor Christopher Waller set a bar in London: if October core CPI came in around 0.3% or higher, a 50 basis point hike should be considered in December. A few hours later, core CPI printed 0.3% month-over-month, the third straight month at that level.

Headline was hotter still. It rose 0.4% month-over-month against a 0.3% economist estimate, the third straight month at 0.4% or higher. Both readings came in about a tenth of a point above consensus.

Markets took it seriously. The 10-year Treasury yield pushed back above 5%, touching 5.01% at midday, and the Treasury's daily series has it at 4.98% today versus 4.88% on Monday. By 12:44pm ET the Nasdaq was down 1.61% and the S&P 500 was down 0.94%. CME FedWatch put the odds of a 50bp December hike at roughly 11% today, up from zero a week ago.

My read: 11% looks low. Waller said hiking only 25 basis points "would put our credibility at risk, a risk I am not eager to take," and the data met his own condition the same day he stated it. He framed it as his view, not the committee's, and the next decision comes at the December 8-9 FOMC meeting. I'm curious how the rest of the committee argues for 25 when a sitting governor's stated test has already been met.

Sources:
Reuters: https://www.reuters.com/business/sp-500-dow-futures-climb-oil-slide-lifts-sentiment-2026-11-10/
Morningstar/PRNewswire: https://www.morningstar.com/news/pr-newswire/20261110ln94369/rate-trading-rose-in-october-and-a-fed-governor-leans-toward-backing-a-december-hike
ThriveInMarkets: https://thriveinmarkets.com/market-insights/evening-review-2026-11-10/

Not financial advice. For informational and educational purposes only.