Bitunix Analyst: Core Inflation Stays High for Three Months — Fed Debate Heats Up Over Hike Size

BlockBeats news, November 11—US October CPI rose 0.4% month-on-month, above the market』s 0.3% expectation. Although slower than September』s 0.6%, core CPI still rose 0.3% MoM—the third consecutive month at the same pace, failing to slow to 0.2% as expected. Housing prices rose 0.3% and contributed more than 30% of the total gain, while food and energy prices rose 0.5% and 0.7% respectively. With base-period data missing due to last year』s government shutdown, year-over-year figures still cannot be calculated—making the persistence of core prices the central focus for policy judgment.

What deserves attention is that inflation pressure is not concentrated in a single item. Medical care, recreation, auto insurance, and parts of the services basket continue to rise. Even though used car prices fell 1.2%, this was not enough to offset pressure elsewhere. The three-month annualized core CPI has climbed to 3.7%—meaning price momentum has not effectively cooled. This has lifted hawkish voices inside the Fed: Waller said the data has reached his threshold for considering a 50 basis-point hike in December, while Logan argued the Fed should cumulatively hike at least another 50bp. Paulson, by contrast, still prefers a gradual approach—showing that the disagreement is about the speed of tightening, not whether inflation needs to be addressed.

Markets quickly reflected the policy risk. The 2-year Treasury yield rose 19 basis points in a single day to 4.75%, with the dollar strengthening in tandem. A 25bp December hike has now become the market』s main expectation, with 50bp remaining a low-probability option. Separately, Bowman warned that if AI investment fails to deliver expected returns, it could trigger equity valuation corrections and push private-market funding costs higher. The Fed therefore faces dual pressure: tightening too slowly could allow inflation to persist, while tightening too quickly could aggravate financial market fragility. For crypto, if the dollar and short-end yields remain elevated on tightening expectations, risk-asset liquidity will stay constrained. Ahead, the key is whether services inflation cools and whether employment data can support a more aggressive policy path.