US inflation rises above expectations in October

US consumer prices rose 0.4% in October, down from 0.6% previous month but ticked above 0.3% forecast.

So called core inflation, excluding the volatile food and energy components, rose 0.3% last month, unchanged from September, but beat expectations for 0.2% increase.

Higher than expected inflation in October, is likely to keep the US central bank   on course for a rate hike in December.

The US Labor Department’s Bureau of Labor Statistics did not publish year on year inflation readings because last year’s federal government shutdown prevented the collection of consumer price data in October 2025, leaving no comparison base.

Annual CPI jumped 3.7% in September, signaling that values remain well above Fed’s 2% target, with high oil prices and import tariffs, seen as main inflation drivers.

However, missing data from last year have no impact on the calculation of the Personal Consumption Expenditures Price Index, Fed’s preferred inflation gauge, which continues to hold above 3%.

US policymakers keep more cautious approach to monetary policy and repeated that each policy decision will mainly depend on the latest economic data, following the latest policy meeting in which the central bank left interest rates unchanged in the 3.75%-4.00%.

On the other hand, the financial markets widely expect a 25 basis points rate hike in December and see possibility of Fed entering new tightening cycle if inflation rises further.