U.S. inflation accelerated more than expected in September, raising the prospect of further Federal Reserve rate hikes and sending bitcoin sharply lower.
The September Consumer Price Index rose 0.6%, according to a Wednesday morning report from the Bureau of Labor Statistics. That is up from 0.4% in August and in line with economist forecasts for 0.6%. On a year-over-year basis, CPI rose 3.7% versus 3.4% in August, above estimates for 3.6%.
Core CPI, which strips out food and energy costs, rose 0.3% in September — the same pace as August but above consensus forecasts for 0.2%. Year-over-year core CPI came in at 2.6%, up from 2.4% the previous month and above estimates for 2.5%.
Market Reaction
- Bitcoin (BTC) dropped $1,000 on the news, trading at $82,800 after the report.
- The 10-year U.S. Treasury yield jumped 9.3 basis points to 5.308%.
- The 2-year Treasury yield soared 13.1 basis points to 4.924%.
- Nasdaq 100 futures fell 0.65% and S&P 500 futures declined 0.3%.
- Gold slumped 1.5% to $4,116 per ounce.
Ahead of the data, several Fed speakers had signaled the central bank was likely to raise interest rates another 25 basis points before year-end. Market pricing had reflected that outlook, with most participants expecting the Fed to pause at its upcoming meeting this month but hike at its final meeting of the year in early December. The hotter-than-expected inflation report could put an October rate hike back on the table.
Source: CoinDesk
