Markets Drop on Hot CPI, Waller Signaling a Potential 50-BP Hike in December: Nov. 10, 2026 — 2026-11-10
What moved & why: Fed Governor Christopher Waller signaled a potential 50-bp December hike just hours before October CPI printed hotter than expected, triggering a hawkish repricing across markets despite falling oil prices and easing geopolitical tensions.
Cross-asset:
- Equities: All four major domestic benchmarks declining; tech providing heaviest drag; 6 of 11 principal sectors in the red.
- Rates/Treasuries: Yields soaring by double digits across the curve, led by monetary-policy-sensitive short end; odds of a 50-bp hike at 11%; author argues Treasuries attractive buys, particularly 2–5-year maturities.
- Dollar: Strengthening on tighter financial conditions.
- Oil/Commodities: WTI crude traded as low as $83.88/bbl (lowest since Aug. 28) on Trump's signaling of reduced appetite for Iran military action; commodities broadly hurt by hawkish repricing.
- Crypto: Cryptocurrencies hurt by tighter financial conditions; volatility protection premiums modestly higher.
Econ / Fed angle: October headline CPI +0.4% m/m and core +0.3% m/m both exceeded forecasts; broadening inflationary pressures evident across gasoline (+1%), electricity (+0.9%), transportation services (+0.8%), and dining/food. ADP weekly payroll increases accelerated to 19.75k four-week moving average. Author argues Fed is already at elevated 3.875% midpoint and larger-than-normal raises unjustified; supply shock risk warrants caution, especially with January meeting offering additional opportunity.
Watch next: November inflation trajectory (expected to decline if WTI remains in the 80s); geopolitical premium sustainability; potential move to 70s oil could return inflation to 2-handle by March.