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US inflation is ACCELERATING, more Fed hikes are coming: Headline CPI rose +0.4% MoM in October, above the +0.3% expected, while core CPI increased +0.3%, also exceeding the +0.2% anticipated by consensus. Annualized core inflation over the past 3 months accelerated to 3.7%, its highest level since January 2025, while supercore inflation surged to 5.5%, its strongest pace since April 2024. Energy prices increased +0.7% and food prices +0.5%, while shelter rose +0.3%, accounting for more than 30% of the monthly headline CPI increase. Fed Governor Chris Waller warned that persistent monthly core inflation of +0.3% or higher could warrant considering a 50-basis-point rate hike in December, with markets subsequently pricing in a 14% probability of such a move. Following the hotter-than-expected report, US stocks fell, Treasury yields moved higher and the US Dollar strengthened, reflecting increased expectations of further Fed tightening. Inflation is putting the Fed's tightening cycle back in focus.

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