Core prices rose 0.3% in October, reaching the threshold Federal Reserve Governor Christopher Waller had set for a half-point rate increase. The source expects the Fed to raise rates in December, although markets have already priced in a move.

Services and spending on artificial-intelligence infrastructure are adding pressure that lower crude prices cannot directly relieve. Doctor visits, childcare, restaurant meals and hotel stays continued to get more expensive; auto insurance rose 0.7% in October. Data-center construction has also increased costs for chips, power-generation equipment and copper, with effects reaching consumer electronics. Smartphone prices climbed 1.4% in October, their largest monthly increase on record, while television prices rose 3.3% in a category where prices typically decline.

Oil-related costs remain elevated, too. War-risk insurance, rerouting and naval escorts through the Strait of Hormuz add $20 to $30 to each barrel of Gulf crude, according to the source. Diesel supplies are expected to remain tight while Ukrainian drone strikes disrupt about 30% of Russia’s refining capacity. U.S. crude still costs about $30 more than it did a year ago. The source’s final sentence about Saudi Arabia is incomplete, so it provides no further detail on that point.