Fed Pause Rate Cuts More Likely? September CPI Data Beats Expectations, Bitcoin Price DipsData released Thursday by the U.S
Fed Pause Rate Cuts More Likely? September CPI Data Beats Expectations, Bitcoin Price Dips
Data released Thursday by the U.S. Bureau of Labor Statistics showed that inflation in September was hotter than expected, potentially further boosting the likelihood that the Federal Reserve will pause rate cuts at its November policy meeting.
The Consumer Price Index (CPI) rose 0.2% in September, exceeding economists' forecasts of 0.1% and matching the gains from August. Year-over-year, the CPI climbed 2.4% in September, topping expectations of 2.3% but down slightly from 2.5% in August. Excluding volatile food and energy costs, the core CPI rose 0.3% in September, above expectations of 0.2% and matching the gain in August. Year-over-year, core CPI climbed 3.3%, surpassing expectations of 3.2% and August's 3.2%.
In the wake of the stronger-than-expected inflation data, Bitcoin prices dipped further, currently trading at $60,800, down nearly 2% from 24 hours ago.
Bitcoin prices have been under pressure for the past ten days. This may be tied to the Fed's surprise rate cut in September, which exceeded expectations, and hawkish comments from Fed Chair Jerome Powell and other central bank officials.
The Fed unexpectedly launched a rate-cut cycle in September, lowering rates by 50 basis points at once, rather than the expected 25 basis points. The move sent cryptocurrency prices surging as investors factored in not only this rate cut but also expectations for a similar large rate cut at the next policy meeting in early November.
However, last Friday's far-stronger-than-expected jobs report, as well as hawkish comments from Fed Chairman Powell and other central bankers, caused a significant reversal in investor expectations for continued large rate cuts from the Fed in November.
The probability of a 50-basis-point Fed rate cut in November has fallen to zero, according to CMEFedWatch tools. In fact, before this morning's inflation data was released, the rate market was pricing in a 26% chance of the Fed not cutting rates in November, up from 0% a week ago.
Today's inflation data could further solidify the Fed's expected pause on rate cuts in November.
That said, the softer jobs data may have slightly offset the disappointing CPI readings. Initial claims for unemployment benefits, which have been very low for weeks, jumped to 258,000 last week, up from 225,000 and expectations of 230,000. However, it is unclear how much of a role Hurricane Helen's aftermath played in this data point.
Overall, the stronger-than-expected CPI data in September suggests that inflationary pressures persist, potentially compelling the Fed to pause rate cuts at its November policy meeting. This would be a negative development for the cryptocurrency market, particularly Bitcoin.
Key takeaways from the article:
- September CPI data came in hotter than expected, with core CPI also exceeding forecasts.
- This data could further increase the likelihood of the Fed pausing rate cuts at its November policy meeting.
- Bitcoin prices have been under pressure over the past ten days, dipping further following the release of the data.
- The Fed unexpectedly launched a rate-cut cycle in September, lowering rates by 50 basis points at once, but investor expectations for continued large rate cuts in November have reversed.
- Softer jobs data may have slightly offset the disappointing CPI data.
Keywords related to the article:
- Federal Reserve
- CPI
- Inflation
- Rate Cuts
- Bitcoin
- Cryptocurrency
- Jobs Data
- Economic Data
- Market Reaction
Themes related to the article:
- Federal Reserve Monetary Policy
- Inflation
- Cryptocurrency Markets
- Economic Outlook
- Investment Strategies
Background information related to the article:
- The Fed has recently made two rate cuts, but investor expectations for future rate cuts have shifted.
- Bitcoin prices have been volatile recently, influenced by Fed policy and economic data.
- Economic data has a significant impact on market sentiment and investor confidence.
Analysis related to the article:
- The stronger-than-expected CPI data in September suggests that inflationary pressures persist, which could make the Fed more cautious in the coming months.
- A Fed pause on rate cuts in November could negatively impact the cryptocurrency market, especially Bitcoin.
- Investors should closely monitor Fed policy statements, as well as upcoming economic data releases.
Conclusions related to the article:
- September CPI data is putting pressure on the cryptocurrency market, sending Bitcoin prices lower.
- The likelihood of the Fed pausing rate cuts is increasing, which would negatively impact the cryptocurrency market.
- Investors should closely monitor future economic data releases and adapt their investment strategies accordingly.
I hope this translation is helpful!
Disclaimer: The content of this article is sourced from the internet. The copyright of the text, images, and other materials belongs to the original author. The platform reprints the materials for the purpose of conveying more information. The content of the article is for reference and learning only, and should not be used for commercial purposes. If it infringes on your legitimate rights and interests, please contact us promptly and we will handle it as soon as possible! We respect copyright and are committed to protecting it. Thank you for sharing.(Email:[email protected])
