Commerzbank Research argues that strong October payrolls and still‑elevated inflation back expectations for another Federal Reserve rate increase in December. The bank highlights that most Fed officials already projected at least one more hike this year, and sees recent data as unlikely to alter that stance. It anticipates a further 25 basis point rise in the policy rate at the upcoming FOMC meeting.

Strong data back December hike call

"The report reinforces our view that the Federal Reserve will raise rates again in December because of inflation risks."

"Of the 18 Fed officials who submitted projections for the appropriate path of interest rates in September, 16 anticipated at least one more rate hike this year. The data released since then are unlikely to have changed that assessment materially."

"Following October's pause in rate hikes, attention now turns to the Federal Open Market Committee's December meeting. Today's figures reinforce our view that the Fed will raise its policy rate by another 25 basis points at that meeting."

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