October CPI: Core hit the target; a 50-basis-point hike in December has shifted from a tail risk to a viable option. October CPI rose +0.4% MoM vs. +0.3% expected; core CPI rose +0.3% MoM vs. +0.2% expected, marking the third consecutive month at +0.3%; super-core CPI rose +0.4%. Waller laid out the conditions plainly during the day: if core inflation remains around 0.3% or higher, a 50-basis-point hike should be considered. Tonight’s data precisely met that threshold—frustrating, to say the least. With oil prices already down to $85, this outcome feels utterly baffling. Before Waller’s speech, Polymarket odds for the December Fed meeting were: 25 bps hike at 78.5%, no change at 19.5%, 50 bps hike under 1%. Before CPI: 25 bps rose to 87.5%, 50 bps at ~4%. After CPI: 25 bps at ~84.5%, 50 bps at ~11%, no change at 2.5%. Kalshi showed similar trends: 25 bps dropped from 88% to 82%, hikes over 25 bps rose from 5% to 12%, no change fell from 8% to 4%. The probability of a cumulative 75-basis-point hike by end of 2026 (i.e., a 50-basis-point hike in December) is now around 9%. Oil prices are pricing in a ceasefire: WTI has fallen below $85, down ~19% from its October 30 high; CNBC reports Brent has slipped below $90, yet the Strait of Hormuz blockade remains in place. Oil is holding down energy costs but failing to curb core inflation. The 2-year U.S. Treasury yield rose ~16 bps to 4.70%, the dollar index hovered near 102, gold fell 2.4%, and Nasdaq futures dropped ~1.5%. BTC slid to $73,588, its lowest level in 11 weeks; spot ETFs saw net outflows of ~$1.48 billion over the first six trading days of November, and U.S. public companies have sold ~108,000 BTC so far this year. The December 9 rate decision precedes the November CPI release on December 10; Friday’s PPI is the next key variable. 1. 25 bps hike (~82–85% probability): Moderate PPI, continued oil decline, 2-year yield back below 4.6%—giving growth stocks and BTC some breathing room. 2. 50 bps hike (~11–12% probability): Hotter-than-expected PPI or more officials backing Waller’s stance. If the 2-year yield holds above 4.7%, BTC could test $73k. 3. No change (2.5–4% probability): Only likely if equities or credit spreads deteriorate sharply. Oil prices keep falling, yet core inflation has held steady at +0.3% for three straight months—indicating inflation has now migrated from energy to core components. Oil’s cooling effect is no longer enough to pull it down. Thus, whether to hike in December is no longer in doubt; the only remaining question is by how much.