Expectations of Federal Reserve rate hikes suddenly heat up: officials say at least two more hikes, 2-year Treasury yield soars 19 basis points in a single day

Dallas Fed President Lorie Logan said the FOMC needs at least two more 25-basis-point rate hikes and that the pace this winter could exceed the fall's, while Fed Governor Christopher Waller called for considering a 50-basis-point move at the December meeting, comments that followed an October core CPI print of 0.3% month-over-month that beat expectations. Two-year Treasury yields jumped 19 basis points to 4.74%, the largest single-day rise since April, and the dollar strengthened against all major currencies. Futures now price a 25-basis-point hike in December, another in January and a possible third in April, a timeline pulled forward from the prior December-and-March expectation, though traders remain cautious on a half-point December move. Logan said two more hikes would lift the fed funds target to 4.25%-4.5%, a mildly restrictive stance, and warned inflation pressures have broadened beyond energy and AI-related capex into the wider economy. She flagged the upcoming PCE release as a risk, saying October data could echo the CPI rebound, and cautioned that the longer inflation runs above target the greater the risk it becomes entrenched. Watch the December FOMC meeting, the PCE print later this month and whether other officials back Waller's 50-basis-point case.