
TD Securities’ macro research team argues that the upside US CPI surprise and firm Core PCE projections make a December Fed rate hike virtually certain. They still favor a 25bp move but see rising odds of an additional hike in early 2027 and consider a 50bp “catch-up” move in December as a clear possibility, pending PPI data and further Fedspeak.
"The strong upside surprise in today's CPI makes a December hike all but certain, in our view."

"After Waller's speech this morning, the debate has now shifted to whether the FOMC will go 25 or 50bps."
"We still favor a 25bp hike with a rising risk of another hike in January."
"We believe that today's data certainly seals a Dec rate hike by the Fed."
"However, following Governor Waller's remarks pre-CPI, the discussion will now center around the need for implementing a "catch-up" 50bps rate hike in December, or whether to maintain course with a 25bps rate increase and provide strong guidance toward a potential January follow-through."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)