The consumer price index (CPI) increased a seasonally adjusted 0.4% in October 2026, surpassing economists' expectations of a 0.3% rise, according to the Bureau of Labor Statistics. Core CPI, which excludes food and energy, also rose by 0.3%, exceeding the forecast of 0.2%. This inflation report raises concerns for the Federal Reserve regarding its interest rate strategy, with traders now fully pricing in a quarter percentage-point increase at the Fed's upcoming meeting on December 8-9, and assigning a 13.6% chance of a half-point hike. The report highlights ongoing inflation pressures, particularly in food and energy costs.