In October, the annual inflation rate reached 2.6%, in line with forecasts.

The Bureau of Labor Statistics reported on Wednesday that inflation increased slightly in October, in line with Wall Street's expectations.

The 12-month inflation rate rose to 2.8% from 2.6% due to a 0.2% increase in the consumer price index, which measures the cost of various goods and services.

The readings were both in line with the Dow Jones estimates.

The move was even more pronounced, with Core CPI accelerating 0.3% for the month and reaching 3.3% annually, while also meeting forecasts.

Stock market futures nudged higher following the release while Treasury yields fell.

In October, energy costs remained unchanged despite a recent decline, while the food index rose by 0.2%. On a yearly basis, energy prices decreased by 4.9%, but food prices increased by 2.1%.

Although there were indications of moderation in other areas, the rise in shelter prices remained a significant factor in the movement of the Consumer Price Index (CPI). The shelter index, which accounts for approximately one-third of the broader index, increased by 0.4% in October, which was double its September increase and up 4.9% on an annual basis. The category was responsible for more than half of the increase in the all-items CPI measure, according to the Bureau of Labor Statistics (BLS).

The readings made it harder for the Federal Reserve to achieve its 2% inflation target, which could make it more challenging for the central bank to implement its monetary policy strategy, especially with a new administration coming into power in January.

The implementation of more tariffs and government spending by President-elect Donald Trump could potentially increase growth but also worsen inflation, which persists as a significant issue for American households despite its decline in mid-2022.

Recently, traders have reduced their expectations for Fed rate cuts due to the central bank's decision to cut 0.75 percentage points from its key borrowing rate and its subsequent inaction.

Traders anticipate a three-quarters of a point reduction in cuts by the end of 2025, which is half a point less than what was previously priced before the presidential election.

This is breaking news. Please check back for updates.