Annual inflation rate hit 2.6% in October, meeting expectations

Inflation perked up in October though pretty much in line with Wall Street expectations, the Bureau of Labor Statistics reported Wednesday.

The consumer price index, which measures costs across a spectrum of goods and services, increased 0.2% for the month. That took the 12-month inflation rate to 2.6%, up 0.2 percentage point from September.

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

Excluding food and energy, the move was even more pronounced. The core CPI accelerated 0.3% for the month and was at 3.3% annually, also meeting forecasts.

Stock market futures nudged higher following the release while Treasury yields fell. Following the release, traders sharply raised the odds that the Federal Reserve will cut its key interest rate by another quarter percentage point in December.

Energy costs, which had been declining in recent months, were flat in October while the food index increased 0.2%. On a year-over-year basis, energy was off 4.9% while food was up 2.1%.

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