Bank of America says October's hotter-than-expected inflation report makes a Fed interest rate hike in December almost certain. The bank still expects a 25bps increase, but says a larger 50bps hike is now possible.

BANK OF AMERICA WARNS FED COULD DELIVER 50BPS HIKE IN DECEMBER Bank of America says October's hot CPI report virtually guarantees a December Fed rate hike — and opens the door to a larger 50bps move. Headline CPI rose 0.4%, while core CPI climbed 0.3%, marking a third consecutive upside inflation surprise. BofA now estimates core PCE inflation at 3.3% YoY. Price pressures are spreading across goods and services, with electronics, airfares and hotels driving increases. BofA still expects 25bps in December, but sees growing risk of another hike in January rather than March. The bank warns the Fed is falling behind inflation and calls October's decision to hold rates a potential policy mistake.

BANK OF CANADA MINUTES: THE GOVERNING COUNCIL NOTED THAT RISING COST PRESSURES WOULD EVENTUALLY BE REFLECTED IN CORE MEASURES OF INFLATION, AND THAT EXPECTATIONS FOR INFLATION MAY HAVE BECOME MORE SENSITIVE TO RECENT PRICE CHANGES