BTC Price Reacts to Latest US CPI Data Ahead of FOMC Meeting
As expected, the US Consumer Price Index rose 2.5% year-on-year in August, down 0.4% from July.
According to experts, this move has almost settled the debate over whether the Federal Reserve will cut the base interest rate by 25 basis points or 50 basis points.
The CPI rose 2.5% in August, indicating a moderate decline in the index over the past year. In fact, the year-on-year increase in August 2023 was 3.7%. The peak in 2024 is in March at 3.5%.
The core CPI, which excludes volatile sectors such as food and energy, rose 3.2% in August 2024, the same as the July figure.
This CPI report is of particular significance to investors because it is the last report before the FOMC meeting on September 18-19. Recall that Fed Chairman Jerome Powell said in late August that it was time for the central bank to start cutting interest rates.
Most experts now believe that the promising inflation numbers mean the Fed will cut by 25 basis points next week.
If so, this development may already be priced in, especially for riskier assets like bitcoin.
The price of the major cryptocurrency was relatively stable before the CPI figures were released. Following the announcement, the price dropped to $56,200 (on Bitstamp) before spiking back up to around a thousand dollars.
However, considering previous examples of significant price movements, today's $1,000 rise and fall seems insignificant.
Bitcoin/Price/Chart 11.09.2024. Source: TradingView
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