Bitcoin Declines Following CPI Print Despite Slowing Inflation Data
The latest U.S. Consumer Price Index (CPI) data released Wednesday showed consumer prices rising less than expected. According to the Bureau of Labor Statistics, the CPI rose 2.5% on an annual basis through August, coming in lower than an expected 2.6% increase. On a monthly basis, inflation held steady at 0.2%, matching July's figure.
This data suggests that the Fed's aggressive rate-hiking campaign over the past 18 months may be achieving its desired effect of cooling inflation. Despite this seemingly positive economic development, Bitcoin (BTC)'s price experienced a slight dip following the release of the data.
BTC declined slightly to $55,591. Other major cryptocurrencies like Ethereum and Solana also saw modest declines, falling to $2,300 and $130 respectively. However, BTC has since recovered, trading back above $58,000 and gaining 2.5% over the past 24 hours. ETH and SOL have also rebounded slightly, gaining 0.86% and 1.81% respectively.
The fresh inflation data will likely play a crucial role in the Federal Reserve's decision-making process as it prepares for its policy meeting next week. Market expectations for a 0.25% rate cut have strengthened, with the CME Group's FedWatch Tool now indicating an 85% chance of such a move, up from 67% prior to the inflation report.
The labor market also continues to play a significant role in Bitcoin's price movements. Last week, a softer-than-expected U.S. jobs report caused Bitcoin to fall as low as $53,300, underscoring the cryptocurrency's sensitivity to broader economic indicators.
