December Fed Rate Increase Considered Nearly Certain as Focus Shifts to Pace

October’s 0.3% core-price rise met a threshold Federal Reserve Gov. Christopher Waller had set for considering a larger December increase, while Dallas Fed President Lorie Logan later signaled that current inflation pressure may warrant faster hikes.

A December rate increase is considered nearly certain after a third consecutive firm inflation report, shifting attention to the pace of tightening. The focus has shifted to the pace of tightening, following a three-month acceleration in core inflation.

Before the report, Waller had supported holding rates steady the previous week. He said a monthly core-price rise near 0.3% in October would make a 50-basis-point December increase worth considering. The report matched that threshold.

Possible paths include raising rates by 25 basis points at each meeting, making one 50-basis-point move or signaling a series of quarter-point increases. The range spans the two or three additional increases some officials have envisioned and a longer period of restraint aimed at cooling the economy and reducing inflation. The Fed’s meeting is scheduled for Dec. 8-9.