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US inflation edges higher, lifting bond yields and Fed rate-hike bets
US consumer prices rose 0.4% in October, slightly above expectations, pushing up bond yields and bets on a December Fed rate rise. Higher yields can mean higher borrowing costs for households and companies.
US consumer prices rose 0.4% from September to October, slightly more than had been expected. Gasoline prices dipped during the month, which held the increase down. The reading still showed a cooldown in price increases, though it came after Republicans lost ground in the midterm elections, a result largely seen as a rebuke over high prices.
The Bureau of Labor Statistics, a government statistics agency, skipped its regular year-over-year inflation number, which measures prices against the same point a year before. The consumer price index (CPI) follows the cost of a set bundle of goods and services. That number is absent because officials could not gather the information in October 2025, when the government was shut down.
US 10-year Treasury yield5.16%down −0.54%over 1 monthPrices can be delayed by 15 minutes or more. Past moves say nothing about future ones.
Also in this story
Dollar indexup +0.58%1 monthFederal Reserve Governor Christopher Waller said he would still support a 25 basis point rate hike in December, even if inflation eases. A basis point is one-hundredth of a percentage point, so 25 basis points amounts to a quarter of a point. Two Fed officials hinted that the central bank might have to pick up the pace of its rate moves. David Kelly, chief global strategist at JPMorgan Asset Management, said a half-point move is unnecessary next month.
10-year Treasury yields
- Auction yield5.02%
- Secondary market yield5.01%
Yields on the 10-year US Treasury at its latest sale and in the secondary market.
Bond prices fell and yields rose. A bond yield is the return an investor earns on a bond, and it moves in the opposite direction to the bond's price. The US Treasury sold $42 billion of 10-year debt at 5.02%, above the 5.01% yield on existing bonds in the secondary market. Demand from investors at the sale was weak.
Japanese government bond yields jumped, and the yen fell to its lowest level in over a month. The dollar rose to a four-week high. Stocks trimmed their losses as chipmakers rebounded, while gold edged higher and Bitcoin fell below $73,500.
For households and companies, higher yields can make borrowing more expensive. The Federal Reserve's next decision on interest rates comes at its December meeting, and traders are watching it closely.
GuideWhen is the next Fed meeting? The date and what futures price
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- US 10-year Treasury yield, Dollar index
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