According to U.Today, the key Federal Reserve inflation rate reached 2.1% in September, aligning with expectations and bringing it closer to the Fed's target. The Commerce Department reported that the personal consumption expenditures (PCE) price index increased by 0.2% for the month, seasonally adjusted, while the 12-month inflation rate stood at 2.1%, matching Dow Jones projections. The core PCE price index for September was 2.7% year-over-year, consistent with expectations of 2.6% and the previous value of 2.7%. Month-over-month, the core PCE price index rose by 0.3%, in line with expectations and a revision from the previous value of 0.1%.
The PCE data is the Federal Reserve's primary inflation gauge, although policymakers also consider other measures. The Fed aims to maintain inflation at 2% per year, a target not achieved since February 2021. The headline rate for September decreased by 0.2 percentage points from August. The core inflation rate was 2.7%, up 0.3% from the previous month. This data comes as markets speculate that the Fed might lower its benchmark short-term borrowing rate in its upcoming meeting next week.
The release of the key inflation rate coincided with profit-taking in the crypto market following a rally that saw Bitcoin reach $73,000, its highest level since mid-March. As investors processed the latest economic data, cryptocurrencies broadly traded in the red, with significant losses reported across the board. Bitcoin, Shiba Inu, Pepe, Chainlink, Bonk, and WIF experienced losses ranging from 1.7% to 7% in the last 24 hours. The selling resulted in liquidations worth approximately $136 million, according to CoinGlass data.
Inflation rates have been a significant concern for crypto markets, as they could influence the Federal Reserve's monetary policy decisions. A lower inflation rate may suggest a looser policy stance, generating optimism among crypto investors who view it as a potential driver for price increases. Conversely, high inflation rates remain unfavorable for risk assets, including cryptocurrencies. In the coming days, the market will likely focus on any indications from the Fed regarding its next policy measures. Policymakers are currently in a
