Federal Reserve Governor Christopher Waller raised the possibility of a half-percentage-point rate hike in December. He stated the condition plainly: core inflation in the US for October at around 0.3% month-over-month or higher. The statement came on Tuesday, November 10, during the European session.
Core inflation is the rise in consumer prices excluding food and fuel. The Fed moves the rate in increments, and 0.5 pp is twice the usual 0.25 pp step.
The October CPI report comes out the same day. So for a trader it all comes down to one number: it determines which rate step the market will talk about.
What Waller said
He will support tightening regardless of the outcome. Even if the October data comes in better than September's, Waller will vote for a 0.25 pp hike.
- He called the September statistics bad, and inflation too high.
- The breadth of price growth worries him separately: many categories are rising in price at once.
- In October he was ready to wait on tightening.
- The promised hikes must be delivered within a reasonable timeframe.
Why he expects prices to rise
Waller called the labor market solid. Supply and demand are roughly balanced, and employment is close to the Fed's target.
- Producer prices - Fed staff calculations point to further growth.
- The energy shock - may prove more persistent.
Market reaction and the catch in the data
The dollar was bought up immediately. It recovered the dip with a V-shaped move.
- 101.67 - the DXY index stayed around this level. DXY shows the dollar's exchange rate against a basket of major currencies.
- 8.6 out of 10 - that is how FXStreet rated the hawkishness of the speech; the historical average is 7.2.
A nuance of the report. There will be no year-over-year changes for most categories in the October CPI.
Data for October 2025 was not collected due to the US government shutdown from October 1 to November 12, 2025. Comparisons will have to be made using monthly figures.
What's next?
- Scenario A. Core inflation at 0.3% or higher - a 0.5 pp step enters the conversation.
- Scenario B. A figure below September's - 0.25 pp remains on the table.
- DXY and EUR/USD - the main pairs in focus.
- USD/JPY - above 158.00.
- Gold - below $4100 with resistance at $4150.
- Bitcoin - below $75,000.
Publication dates for statistics and Fed meetings are collected in the economic calendar. The rules for trading the news differ across programs, so choosing a challenge to match your style is worth doing in advance.
The key point: everything hinges on October core inflation. 0.3% and above opens the conversation about a 0.5 pp step; a figure below September's leaves 0.25 pp.
Do you trade the first minute after the number?
You know how DXY behaves in the first minute after the data. Either you are already in a position, or you are chasing the pullback. Prop programs treat this differently: some allow entry on the release of the statistics under a separate clause, some void a trade made two minutes before the number, and some cut the allowed volume during the publication. It makes sense to check this before the number appears on the screen. A filter by trading style will immediately remove programs where such an entry is prohibited.