US Consumer Inflation Keeps December Rate Hike Debate Alive

The US consumer price index rose 0.4% in October. This monthly result was lower than the 0.6% increase recorded in September. The slowdown in the headline index contrasts with the stability observed in core inflation.

The core CPI, which excludes food and energy costs, rose 0.3% for the third consecutive month. This level was cited by Federal Reserve Governor Christopher Waller as a benchmark for evaluating a 50-basis-point interest rate hike in December. The official had conditioned this stance on persistent monthly readings at that level.

Data from the Bureau of Labor Statistics shows that the housing sector contributed to more than 30% of the monthly rise in the headline index. Energy prices climbed 0.7% and food prices recorded a 0.5% increase during the period. The lack of improvement in the core index reinforces caution regarding the price trajectory.

The fact that the core index remained at 0.3% creates tension in American monetary policy. Although the overall pace has slowed, the persistence of essential prices keeps the discussion about the magnitude of the next adjustment alive. The Federal Open Market Committee has not yet reached a final decision for the end of the year.