US stocks fell as expectations grew that the Federal Reserve may need to raise interest rates more aggressively after US consumer price index data showed high inflation. The S&P 500 fell 0.38 percent, or 28.83 points, to 7,521.11, while the Dow Jones Industrial Average fell 0.30 percent, or 156.43 points, to 52,233.32. The US dollar strengthened.
Markets had expected a 25 basis point hike in December. Fed Governor Christopher Waller said a 50 basis point hike may be needed then. Dallas Fed President Lorie Logan backed at least two further increases of 25 basis points each.
Bond market reaction
The two-year US Treasury yield recorded its largest daily rise since April 2025.
Analysts quoted by Bloomberg discussed the December and January meetings, and a possible move in March. Lindsay Rosner of Goldman Sachs Asset Management said inflation that remains difficult to control means further hikes in 2027 cannot be ruled out.
Views on the next move
Seema Shah of Principal Asset Management said conditions for larger rate hikes have not yet occurred.
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By our market data, as of 00:20 GMT on 11 November, the federal funds rate stood at 3.88 percent, in force since 6 November.
Source: Federal Reserve | Data: S&P Dow Jones Indices · FRED — St. Louis Fed
