US October CPI release could shape expectations for a December Fed rate hike
The Bureau of Labor Statistics will publish October CPI data on Tuesday, with analysts forecasting modest month-on-month gains and markets pricing an 80% chance of a 25-basis-point rate increase in December.
The U.S. Bureau of Labor Statistics is set to release the October Consumer Price Index on Tuesday, a data point that may influence the dollar’s value as investors reassess the Federal Reserve’s interest-rate outlook. The report will not contain 12-month percentage changes for most series because October 2025 data were not collected during the government shutdown that ran from October 1 to November 12, 2025.
The agency said, \"For most CPI series, BLS could not publish October 2025 indexes. As a result, BLS will not publish 12-month percent changes for October 2026 for indexes where October 2025 data are not available.\"
Forecasts show headline CPI rising 0.3% month-on-month, down from a 0.6% increase in September, while core CPI is expected to climb 0.2% after a 0.3% gain the prior month. Deutsche Bank economists anticipate a moderation, projecting headline CPI at 0.20% and core CPI at 0.20%, and they continue to expect 25-basis-point rate hikes at the December and March FOMC meetings unless financial conditions tighten markedly.
The CME FedWatch Tool currently indicates about an 80% probability that the Fed will raise its policy rate by another 25 basis points at the year-end meeting. In a recent news conference, Fed Chair Kevin Warsh described labor-market conditions as \"positive\" and said policymakers remain focused on the price-stability mandate.
Analysts note that a lower-than-expected CPI print, especially if energy prices keep falling, could reduce market expectations for a December hike, potentially weakening the dollar and supporting EUR/USD. Conversely, a print at or above consensus, combined with stalled cease-fire talks with Iran, could reinforce rate-rise expectations, though the dollar’s upside may be limited.
ING strategists argue that the recent dollar strength depends heavily on risk-off sentiment, warning that the rally may be \"a bit too stretched\" and could face a moderate correction if market nerves ease. They expect the October CPI to match consensus at 0.3% for both headline and core, which they say should cement expectations for a December Fed hike.
European-session analyst Eren Sengezer described EUR/USD as trading in a narrow channel, noting that the daily Relative Strength Index has hovered near 50 without breaking higher. He identified 1.1260 as the nearest resistance, with further upside targets at 1.1335 and 1.1410, while support lies around 1.1130, below which a move toward 1.1000 could be triggered.