Fed Governor Christopher Waller said Tuesday he backs a December rate hike and wants a half-point move on the table.
For an ecommerce entrepreneur, that is a direct hit on the cost of money. Variable SBA loans, business card balances, inventory lines and revenue-based financing all price off rates the Fed controls, and October’s inflation report came in hot enough to meet Waller’s own test for the bigger move. If you run a high-ticket store on borrowed capital or sell big-ticket items that customers finance, this is the week to check your numbers. I track these rate moves at Ecommerce Paradise because they decide how much a $4,000 sofa or a $9,000 sauna really costs your buyer and your store.
Below: what Waller said and what the October CPI showed, how the Fed got to a hiking cycle, what a 25 or 50 basis point move does to a store’s financing math, and the moves I would make before the December 9 decision. If you are new to the model, start with my guide to high-ticket dropshipping, because rate risk lands differently on a store selling $3,000 products than on one selling $30 products.
Rates are going up, so put your store’s cash in a business account that actually works for it. Mercury keeps store money separate from personal money, and once your balances reach the Treasury minimum, idle cash can sit in government money market funds and T-bills. Open a Mercury account for your store →
October CPI Runs 0.4% and Waller Backs a December 9 Rate Hike
Waller laid out his view in a speech on November 10, published on the Federal Reserve Board’s website. His base case is a quarter-point hike at the December meeting. “I would still support a 25 basis point increase in the FOMC’s policy rate at our December meeting,” he said.
He went further. If October core CPI ran around 0.3% or higher, Waller said a 50 basis point hike “should be considered” at that meeting. He also warned that “Hiking only 25 basis points would put our credibility at risk,” according to a Traders Agency summary of the speech.
The October number arrived the same morning. The Bureau of Labor Statistics reported that the Consumer Price Index rose 0.4% in October on a seasonally adjusted basis, down from 0.6% in September, per the BLS October 2026 release. Core CPI, which strips out food and energy, rose 0.3% for the second straight month.
Both readings beat forecasts. Economists polled by Dow Jones expected 0.3% overall and 0.2% core, according to Stock Titan’s CPI report. Core has now run at 0.3% or higher for three straight months, which lands exactly on the line Waller drew for a half-point move.
There is a gap in the data. BLS did not collect October 2025 prices because of the government shutdown, so it published no 12-month rate for overall or core CPI this month. The last annual readings were September’s 3.7% overall and 2.6% core, per Stock Titan. Gasoline, measured unadjusted, was up 37.4% from a year earlier, per BLS.
Two lines in the BLS release matter more to high-ticket sellers than the headline. Furniture and bedding prices rose 1.2% in October, and bedroom furniture rose 1.5%. Shelter rose 0.3%, down from 0.4% in September. New vehicles rose 0.2% while used cars and trucks fell 1.2%.
The Fed’s own data shows where borrowing costs sit before any December move. The effective federal funds rate was 3.88% and the bank prime loan rate was 7.00% as of November 6, according to the Fed’s H.15 release. The 2-year Treasury yield stood at 4.51% and the 10-year at 4.86% on the same date.
Credit card rates are already high. The average interest rate on credit card accounts assessed interest was 22.36% in the third quarter of 2026, up from 22.15% in the second quarter, according to the Fed’s G.19 consumer credit release published November 6. Revolving credit hit $1.3685 trillion in September and grew at a 14.5% annual rate that month.
Markets moved quickly. CME FedWatch odds of a December quarter-point hike rose to about 96% from roughly 76%, according to Startup Fortune. Traders Agency, citing CNBC, put the odds at better than 80% and said FedWatch assigned no probability to a 50 basis point move. The two reports were written at different points in the trading day, so treat the exact figure as moving.
How the Fed Got From a September Surprise to a Half-Point Debate
The Fed has been raising rates in 2026, not cutting. A 25 basis point hike in September lifted the target range to 3.75% to 4.00%, a move Startup Fortune described as a surprise. A quarter-point hike in December would take the range to 4.00% to 4.25%.
The Fed held at 3.75% to 4.00% on October 28, but the vote was split. Governor Lisa Cook and Cleveland Fed President Beth Hammack dissented in favor of a hike, per Stock Titan. I covered that meeting in my breakdown of the October 28 hold. The odds kept climbing from there, as I wrote in my November 3 update on hike odds and the prime rate.
Waller’s speech fills in the backdrop. September PCE inflation rose 0.5% for the month and 3.7% over 12 months, and core PCE rose 3.1% over 12 months, he said. More than 70% of core services components rose faster than 3% over 12 months. The unemployment rate was 4.1% in October, and payrolls grew by 165,000. Q3 GDP grew at an initial estimate of 3.4%. That PCE number lines up with the late-October PCE report I covered, when real incomes fell.
The timing gives October CPI extra weight. The November CPI report is due December 10, the day after the Fed’s decision, so October is the last CPI reading before the vote, according to Stock Titan.
The counterpoint is real. Waller is one voter. No other voters have signaled support for a 50 basis point move, and the Fed under Chair Kevin Warsh has stuck to 25 basis point steps so far, per Startup Fortune. A half-point hike would be the Fed’s first move larger than 25 basis points since 2022. Chicago Fed President Austan Goolsbee said on November 9 that the Fed must avoid letting the economy overheat, per Traders Agency. That view supports tightening but says nothing about the size.
The data also has holes. Without a 12-month CPI rate, the Fed is reading monthly prints that swing with energy. Waller himself pointed to energy pass-through as an upside risk and said markets had already priced in some tightening before the October meeting. A soft November print could not change the December vote, because it lands a day late.
Prime at 7.25% and Card APRs Above 22%: What a Hike Costs Your Store
My read is that a December hike is close to locked and the real question is 25 or 50. I would plan for 25 and stress-test for 50. Nothing here is personalized financial advice, and I am not a financial advisor. This is how I would think about it as an operator.
Start with prime. Banks have long set prime at 3 points over the top of the Fed’s target range, which is how a 4.00% ceiling produces today’s 7.00% prime. If that convention holds, a quarter-point hike moves prime to 7.25% and a half-point hike moves it to 7.50%. Anything you borrow at “prime plus” reprices with it.
SBA 7(a) is the clearest example. The SBA caps variable-rate 7(a) loans at base rate plus 6.0% for loans of $50,001 to $250,000, and base rate plus 3.0% for loans over $350,000, according to the SBA’s 7(a) terms page. Here is hypothetical math. A $150,000 variable loan at the cap sits at 13.00% today. A 25 basis point hike adds about $375 a year in interest. A 50 basis point hike adds about $750. That is not a store-killer, but it stacks on top of the iCAP platform change I wrote about in my SBA 7(a) iCAP breakdown.
Credit cards are where carried balances hurt. At the Fed’s 22.36% average for accounts assessed interest, a hypothetical $40,000 balance costs about $8,944 a year. Variable card APRs usually move with prime, so another half point adds roughly $200 a year to that same balance. If you pay in full every month, a hike barely touches you. If you float ad spend or deposits for 60 days, you are paying for the Fed’s decision. I keep my business credit card picks focused on cards that reward ad spend for exactly this reason: the rewards only beat the APR when you never carry a balance. Amex’s change to Pay Over Time, which I covered in my Amex Pay Over Time post, matters more in a hiking cycle.
Revenue-based financing is less direct. Providers quote a flat fee, not an APR, but their own cost of capital rises with rates. Expect tighter offers or higher fees in 2027. Check the current terms in my revenue-based financing guide before you sign anything this quarter.
The demand side matters most for high-ticket stores. Furniture prices jumped 1.2% in October, and Whirlpool already raised US appliance prices 7% for Q4. Higher rates make the financing your customers use more expensive, and big-ticket purchase plans were already falling in the October consumer confidence data. Scenarios I would plan around: at a 25 basis point hike, expect a small pull-forward of holiday orders from buyers who want to lock in before prices and rates rise. At 50, expect more abandoned carts on orders over $3,000 and more customers asking about financing on the phone.
Cash is the upside. Mercury’s Treasury product listed net yields of 3.32% to 3.82% for total deposits of $250,000 to $2 million as of November 6, per Mercury’s own page, with a $250,000 minimum across accounts. Higher rates lift those yields over time. Most small stores never hit that minimum, so the bigger win for them is separating store cash from personal cash in a Mercury business account and knowing exactly what sits idle.
Margins are the lever you control. If your gross margin is 25% and your financing cost rises, the answer is not cheaper ads. It is better products, better suppliers and higher average order values. That is the operator complexity most owners underestimate, and it is why some hand the whole build to my team through the turnkey done-for-you store service instead of learning rate risk, supplier terms and ad math at the same time.
Rising rates squeeze thin margins first. Want my team to tighten the ads and supplier mix on the store you already run? See the scaling service →
Five Money Moves for Store Owners Before the Dec. 9 Fed Decision
What I would do this week, in this order:
- List every variable-rate dollar you owe. Pull each loan, line and card, note the rate, the index it follows and the balance. Anything tied to prime moves the day after December 9, so rank them by balance times rate and pay the top one down first.
- Stop carrying card balances on ad spend. If you float Google or Meta spend, set autopay to the statement balance. Compare cards in my credit card picks and pick one that rewards advertising without tempting you to revolve.
- Clean up your books before you ask a lender for anything. Lenders price risk harder when rates climb. Get your Shopify payouts, fees and COGS reconciled in QuickBooks so your margins are provable, and check your business credit file with my Dun & Bradstreet score guide.
- Move idle cash and pay suppliers smarter. Keep operating cash in a dedicated business account, and if you pay overseas suppliers or VAs, use Wise so FX markups do not eat what rates already took.
- Push financing and urgency to your big-ticket buyers now. Add a pre-holiday email in Klaviyo to past browsers of products over $2,000, and make sure your Shopping ads land on pages that answer the “can I finance this” question. If you want a second set of eyes on your plan, book a call through my discovery page.
Frequently Asked Questions
Did the Fed raise rates on November 10?
No. Governor Waller said he supports a hike at the December 9 meeting and that a 50 basis point move should be considered. The current target range is 3.75% to 4.00% after the October 28 hold.
Why is there no annual inflation rate for October 2026?
BLS did not collect October 2025 prices during the government shutdown, so it could not calculate a 12-month change. The monthly change was 0.4% overall and 0.3% core.
How does a Fed hike change my SBA loan payment?
Variable 7(a) loans are pegged to prime or an optional peg rate, so they reprice when prime moves. Fixed-rate loans do not change. Read my SBA 7(a) post for the platform changes landing January 1.
Will a rate hike hurt high-ticket sales?
It raises the cost of the financing many big-ticket buyers use, which can slow orders at the top of the price range. Stores selling essentials or replacement products usually feel it less, which is one reason I favor those categories in my high-ticket niches list.
Should I lock a fixed rate before December 9?
That depends on your loan, your cash flow and the fees to refinance, so talk to your lender and accountant. I am not a financial advisor. The fact to bring to that call is that markets price a December hike as highly likely.
Is a 50 basis point hike likely?
Markets did not price one as of Tuesday, per Traders Agency, and no other voters have backed it publicly. Waller’s view puts it on the table, not in the bag.
Where can I get a free starting point for picking a product category?
Grab my free high-ticket niches list, then test demand with Google Shopping before you finance any inventory or ad spend.
Want 1-on-1 help stress-testing your store’s margins and financing before rates move again? Get the coaching details →
I have been selling online since 2005 and running my own business since October 2010, and every rate cycle rewards the same owners: the ones who know their margins and do not float balances. The Fed meets December 8 and 9. Get your numbers straight before then. If you are launching from scratch, start your store on Shopify and build it on cash, not credit.
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Trevor Fenner is an ecommerce entrepreneur and world traveler from Seattle, Washington, and the founder of Ecommerce Paradise, a platform focused on helping entrepreneurs build and scale profitable high-ticket ecommerce and dropshipping businesses. With over a decade of hands-on experience, Trevor specializes in high-ticket dropshipping strategy, niche and product selection, supplier recruiting and onboarding, Google & Bing Shopping ads, ecommerce SEO, and systems-driven automation and scaling. Through Ecommerce Paradise, he provides free education via in-depth guides like How to Start High-Ticket Dropshipping, advanced training through the High-Ticket Dropshipping Masterclass, and fully done-for-you turnkey ecommerce services for entrepreneurs who want a faster, more hands-off path to growth. Trevor is known for emphasizing sustainable, real-world ecommerce models over hype-driven tactics, helping store owners build scalable, sellable, and location-independent brands.
He maintains homes in Seattle and Bali, spends most of the year overseas, and usually returns to Seattle for about a month each summer.
