Fed’s December Rate Decision Could Depend on One CPI Number

The US inflation report is becoming an important factor for the Federal Reserve’s December policy decision.

Fed Governor Christopher Waller indicated that he could support a 25 bps rate hike if inflation continues to cool. However, a hotter-than-expected Core CPI reading of 0.3% or higher could push him toward supporting a larger 50 bps increase.

October Core CPI is currently forecast at 0.2% month over month, compared with 0.3% in September.

For financial markets, the difference between 0.2% and 0.3% could be significant. A softer reading may ease concerns around monetary tightening, while a hotter figure could increase pressure on risk assets, including Bitcoin and altcoins.

The key question is whether inflation is finally slowing enough to change the Fed’s outlook.

What’s your expectation for October Core CPI?

- Below 0.2% — Cooler
- 0.2% — As expected
- 0.3% or higher — Hotter

DYOR. This is market analysis, not financial advice.