🌋 Surprising U.S. Inflation Data for September – BTC’s Response
posted 10 Oct 2024
On October 10, the U.S. Bureau of Labor Statistics released the inflation data for September, with the year-over-year Consumer Price Index (CPI) dropping from 2.5% to 2.4%, moving closer to the Federal Reserve’s target of 2%.
However, the CPI figure (year-over-year) was slightly higher than the 2.3% expected by analysts, according to Nick Timiraos from The Wall Street Journal. This news triggered a modestly negative reaction in the crypto market, with Bitcoin’s price dipping by around 0.8% within 10 minutes of the inflation report.
Furthermore, the core CPI (year-over-year) unexpectedly rose to 3.3%, surpassing the forecast of 3.2%, while the monthly CPI (month-over-month) registered 0.2%, beating the predicted 0.1%.
On the positive side, the number of initial jobless claims reached 258,000, compared to the anticipated 231,000. This could encourage the Federal Reserve to continue with rate cuts, softening the market’s overall reaction.
All eyes are now on the Fed’s upcoming interest rate decision, scheduled for November 7. As indicated by the CME FedWatch tool, the current market consensus leans toward a 25-basis-point cut.
U.S. Interest Rate Change Expectations for November Source: CME Group
The Wall Street Journal reports that most analysts believe the Fed will cut rates two more times by 25 basis points each by the end of 2024, totaling a 0.5% reduction. Additionally, a further 1% cut is expected across 2025.
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