Bitcoin slips before U.S. inflation report as traders price in Fed rate increase
Bitcoin experienced a dip ahead of the U.S. inflation report, as traders anticipate a Federal Reserve rate increase, potentially by 25 basis points. Fed Governor Christopher Waller indicated a preference for higher rates, with a hotter-than-expected inflation reading possibly warranting a 50 basis point hike. Meanwhile, oil prices fell, and Anthropic withdrew inaccurate pricing details for a potential share offering.
Why it matters
The upcoming U.S. inflation report and the Federal Reserve's monetary policy decisions significantly influence global financial markets, impacting cryptocurrency, commodities, and equities. These economic indicators are crucial for investors and signal potential shifts in economic stability and growth.
Fed Governor Christopher Waller fueled that interest-rate outlook, saying he favored a higher rate even if inflation cooled last month. A hotter-than-expected reading could warrant raising by 50 basis points, he said. Traders are pricing 25 basis points of tightening for Dec. 9, taking the target range to 4.00%-4.25%, according to the CME Fedwatch tool.
The U.S. Bureau of Labor Statistics is forecast to say headline inflation rose 0.3% month over month in October, with core prices, excluding food and energy, increasing 0.2%. Annual comparisons will not be available because last October’s government shutdown prevented price collection, leaving no comparable data. September’s annual readings were 3.7% and 2.6%, respectively.
Oil offered some relief for markets, falling 2% over the past 24 hours. WTI traded around $84, its lowest since late August, while Brent crude hovered near $90 after President Donald Trump signalled a pause in further Iran strikes.
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