Inflation cools much more than expected in October

Consumer prices rose 7.7% for the year ending in October, according to data released Thursday. The report was better than expected and surprised investors, with markets surging on the news. But the Federal Reserve still has far to go in its battle to tame inflation.

The Consumer Price Index, which measures the changes in prices for a variety of consumer goods and services, was lower than the 8.2% reading in September.

“Today’s CPI report shows inflation is moving in the right direction,” said Eric Merlis, managing director, co-head of global markets at...