U.S. inflation data lifts rate hike risk, pressures bitcoin
Stronger U.S. consumer inflation in September is reviving concerns that the Federal Reserve may need to tighten policy again before year-end. The hotter-than-expected reading hits risk assets immediately, with bitcoin falling about $1,000 to trade near $82,800 after the release.
Highlights
- U.S. CPI rose 0.6% in September, year-over-year inflation climbed to 3.7%, both exceeding expectations and reinforcing a hawkish Federal Reserve outlook.
- Core CPI rose 0.3% month-over-month and 2.6% annually in September, both measures surpassing forecasts and intensifying tightening concerns.
- Bitcoin dropped $1,000 to $82,800 after the data, as markets priced in increased odds of a December Fed rate hike.
September CPI reinforces tightening outlook
As reported by CoinDesk, citing the Bureau of Labor Statistics, the U.S. Consumer Price Index rises 0.6% in September, up from 0.4% in August and in line with economist forecasts. On a year-over-year basis, CPI increases 3.7%, compared with 3.4% a month earlier and above expectations for 3.6%.Core CPI, which excludes food and energy, rises 0.3% in September, matching August but exceeding forecasts for 0.2%. On an annual basis, core CPI climbs 2.6%, versus 2.4% in the previous month and slightly above estimates for 2.5%.
Crypto markets react to Fed rate path concerns
Bitcoin drops $1,000 after the inflation release and trades at $82,800 as investors reassess the outlook for monetary policy. The data increases the likelihood that the Federal Reserve could deliver another 25 basis point rate increase before the end of the year.Before the report, several Fed speakers had already indicated that one more rate hike was likely in 2026. Market pricing reflects expectations that the central bank pauses at its meeting later this month and then raises rates at its final meeting of the year in early December.
Our earlier coverage looked at how investors were positioning ahead of the September CPI report, with U.S. equity futures mixed and markets closely watching the data for clues on the Fed’s next move. We noted that CPI carried extra weight for rate-hike expectations and broader risk sentiment, alongside focus on big bank earnings and shifting moves in oil and tech-related shares.
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