Fed rate hike odds hit 100% as Waller floats bigger December move
“While I am hoping for an improvement over September, even if this occurs, I would still support a 25 basis point increase in the FOMC’s policy rate at our December meeting,” Waller said.
Hours later, Waller’s concern was validated. October CPI showed core inflation stuck at 0.3% for a third consecutive month, precisely the threshold he had flagged.
Rate hike odds immediately jumped to 100%, with futures markets pricing in an 89% chance of a quarter-point increase and an 11% probability of a half-point move, according to CME FedWatch data.
The remarks carry real weight for loan officers and brokers in rate-sensitive markets. The Federal Reserve raised rates in September for the first time since 2023, moving the target range to 3.75% to 4%.
Mike Fratantoni of the MBA, Seema Shah of Principal Asset Management, Eric Orenstein of Fitch Ratings, and Barry Habib of MBS Highway say robust employment data is reinforcing expectations for tighter monetary policy heading into 2027. https://t.co/CSQ8hikcCX
— Mortgage Professional America Magazine (@MPAMagazineUS) November 6, 2026
Inflation breadth driving the concern
September’s personal consumption expenditures (PCE) inflation registered 3.7% year-over-year, with core PCE at 3.1%, well above the Fed’s 2% target.
