U.S. September CPI comes in hot, sending bitcoin sharply lower
The U.S. Consumer Price Index for September rose 0.6%, exceeding economist expectations and signaling persistent inflationary pressure. The report triggered a market sell-off, causing Bitcoin to drop $1,000 and U.S. stock index futures to decline as investors reconsider the likelihood of further Federal Reserve interest rate hikes.
Why it matters
Higher-than-expected inflation data increases the probability of aggressive Federal Reserve monetary policy, which typically exerts downward pressure on risk assets like cryptocurrencies and equities.
The September Consumer Price Index rose 0.6%, according to a Wednesday morning report from the Bureau of Labor Statistics. That’s up from 0.4% in August, and in line with economist forecasts for 0.6%.
On a year-over-year basis, however, CPI rose 3.7% versus 3.4% in August and above estimates for 3.6%.
Core CPI — which strips out food and energy costs — also disappointed, rising 0.3% in September. That was the same pace as August, but above consensus forecasts for 0.2%.
Year-over-year core CPI was higher by 2.6% versus 2.4% the previous month and above estimates for 2.5%.
Bitcoin BTC $83,212.45 dropped $1,000 on the news, now trading at $82,800. The 10-year Treasury yield has shot higher by 6.5 basis points to 5.284%. U.S. stock index futures are all lower, the Nasdaq 100 leading with a 0.65% decline.
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