US consumer prices rose 0.4% in October, a third straight month of hotter-than-expected inflation, as food, energy and housing costs climbed and the Federal Reserve weighs how to respond. The report puts US inflation and Fed rates back at the center of the policy debate.
The latest Consumer Price Index rose 0.4%, driven largely by higher food and energy costs, according to PBS NewsHour. Housing costs rose 0.3% and accounted for roughly a third of the larger-than-expected monthly increase, PBS reported. Axios reported that October marked the third straight month of hotter-than-expected inflation.
Economists now expect inflation to run at about 4% for the year, outpacing wage growth, according to PBS NewsHour. That 4% figure is an economists’ expectation as reported by PBS, not a confirmed figure.
Austan Goolsbee, president and CEO of the Federal Reserve Bank of Chicago, said services inflation is not coming down and is probably not mostly driven by oil prices or tariffs, according to PBS NewsHour. He said the Fed has a limited tool set, only the interest rate, and called the report "borderline disturbing."
Goolsbee said inflation has remained above the Fed’s 2% target for nearly six years. He cited oil prices, tariffs and demand for AI data center construction as drivers. Axios said the Iran war has added to price pressures, alongside tariffs and the AI investment boom, in what it called the sixth consecutive year of steep price increases.
Goolsbee also said the job market has been steady and stable, and that the Fed’s employment mandate is doing pretty well while inflation is not.
According to the PBS interviewer, Christopher Waller has said he is open to a larger-than-usual half-point rate increase at the December meeting. Waller has not been directly quoted in the sources, and no response from him was available. Goolsbee declined to be specific about future rate moves.
The sources do not include a Fed decision or an official Fed statement on rates, and Goolsbee’s comments are his own views. The Axios report was available only as a headline and short excerpt, so its full reporting could not be checked. The PBS text is a transcript that may contain errors, and no other outlet confirmed the CPI figures. No response from the White House or other policymakers was available.
Sources
This article was written with AI assistance from the published reporting listed above. It is part of the World Brief daily news podcast.