UBS sees limited support for a 50bp Fed hike in December in spite of hot October CPI

On the Fed interest rates front, Treasury yields close to 5% keep the US currency supported, including against the yen in the run-up to the Bank of Japan's own expected December hike, which leaves the US-Japan rate gap a key driver of USD/JPY, according to investingLive. Fed funds futures now price around 28 basis points of tightening for December.

Key points

• Headline consumer prices advanced 0.4% in October, above the 0.3% forecast.
• Before the release, he stated a core reading of about 0.3% or more could justify considering a half-point move in December.
• Core prices, which exclude food and energy, climbed 0.3% against expectations of 0.2%.
• Its base case stays quarter-point hikes in December and March.

Inside the Fed interest rates story

Yet the bank states October's data strengthen the case for at least two more quarter-point rises and raise the risk that they come faster. Headline consumer prices advanced 0.4% in October, above the 0.3% forecast. Core prices, which exclude food and energy, climbed 0.3% against expectations of 0.2%.

Before the release, he stated a core reading of about 0.3% or more could justify considering a half-point move in December. Its base case stays quarter-point hikes in December and March.

Why traders are watching Fed interest rates

Expectations for US interest rates sit behind almost every move in the dollar, bond yields and equities. When the outlook for Fed policy changes, traders reprice the whole curve of rate expectations at once.

A more hawkish tone usually supports the dollar and weighs on gold and growth stocks, while a dovish tilt tends to do the opposite. That is why traders read every comment from policymakers closely.

Market reaction and data

Crypto prices at the time of writing, from Binance spot data (2026-11-12 00:15 UTC):

On the currency side, the latest ECB daily reference rates (2026-11-11) show EUR/USD 1.1127, GBP/USD 1.3307, AUD/USD 0.6859, NZD/USD 0.5583, USD/JPY 159.23, USD/CHF 0.8299, USD/CAD 1.4235, USD/CNY 6.6707. These are reference fixes, not live quotes.

What to watch next for Fed interest rates

Traders will focus on upcoming comments from Fed officials, the next inflation and labour-market releases, and pricing in rate futures for clues about the timing of the next policy move.

Key scheduled releases on the economic calendar:

• GBP GDP m/m on Thu Nov 12, 07:00 UTC, forecast 0.0%, previous 0.1%
• USD Core PPI m/m on Fri Nov 13, 13:30 UTC, forecast 0.3%, previous 0.7%
• USD PPI m/m on Fri Nov 13, 13:30 UTC, forecast 0.4%, previous 1.3%

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FAQ

What is the latest Fed interest rates news?

Treasury yields close to 5% keep the US currency supported, including against the yen in the run-up to the Bank of Japan's own expected December hike, which leaves the US-Japan rate gap a key driver of USD/JPY.

How do Fed rate decisions affect forex markets?

Higher US rates tend to attract capital into dollar assets and strengthen the greenback, while lower rates or dovish guidance usually weaken it against other major currencies.

Where does this information come from?

This report is based on coverage from investingLive, checked against market data where available. It is a summary for information only and not investment advice.