Here’s why last year’s government shutdown will haunt October’s inflation data.

The government shutdown last year prevents a direct year-over-year comparison for October inflation, but calculations by The New York Times show overall prices rose around 4 percent compared with October 2025, up from 3.7 percent in September.

Month-over-month, the Consumer Price Index rose 0.4 percent in October after a 0.6 percent jump in September, according to the Bureau of Labor Statistics. Core inflation, which excludes food and energy, rose 0.3 percent for the month and about 2.8 percent on an annual basis.

Food prices drove much of the monthly increase, rising 0.5 percent and about 3 percent year-over-year, likely reflecting surging diesel costs that have pushed up farming expenses. Energy prices overall rose 0.7 percent in October after a 5.2 percent jump in September, with gasoline up 1 percent and electricity up nearly 1 percent.

Fed Governor Christopher J. Waller warned on Tuesday that a quarter-point rate increase may not suffice if inflation does not moderate. He stated that if core inflation rose 0.3 percent or more, as October's data showed, the Fed risked its credibility by not moving more aggressively. "Hiking only 25 basis points would put our credibility at risk, a risk I am not eager to take," Waller said. The Fed is scheduled to meet December 8-9 and has signaled it will raise rates.

Two-year Treasury yields climbed over 0.1 percentage points to 4.67 percent on Tuesday as investors raised expectations for larger rate increases. October marked the seventh consecutive month in which price increases outpaced wage growth. Average hourly earnings rose 3.1 percent year-over-year in October, well below the roughly 4 percent inflation pace.

The Federal Reserve Bank of New York's household debt report released Tuesday shows U.S. mortgage debt balances rose $257 billion from July to September, totaling $13.4 trillion. Home equity line of credit balances rose $23 billion in the third quarter, marking the 18th consecutive quarterly gain and the largest increase since 2005. Homeowners' equity in real estate reached approximately $36 trillion as of September, up from around $18 trillion in 2019.

U.S. stocks opened lower on the inflation data. The S&P 500 fell 0.7 percent and the Nasdaq declined 1 percent at market open.