Bitcoin price reaction to US CPI data

The latest US CPI data for August showed a 2.5% year-on-year increase, in line with general expectations and 0.4% lower than July.

Analysts believe that this data almost settles the debate about the size of the expected interest rate cut by the Federal Reserve, which could range between 25 and 50 basis points.

The highest level of this index in 2024 was in March, reaching 3.5%.

At the same time, the core CPI, which excludes the more volatile food and energy items, rose by 3.2% in August 2024, the same level as in July.

This data is of particular importance to investors because it comes ahead of the Federal Open Market Committee meeting scheduled for September 18 and 19.

It is worth noting that Federal Reserve Chairman Jerome Powell indicated last August that the time may be right to start cutting interest rates.

Following the announcement, Bitcoin’s price dropped to $56,200 (on Bitstamp) before rebounding by around $1,000. However, given Bitcoin’s past price movements, today’s $1,000 price drop and rise is considered insignificant compared to the large swings the currency has seen in the past.