In September, the US Consumer Price Index (CPI) recorded a 0.3% increase, down from a 0.4% rise the previous month. On an annual basis, the CPI climbed to 3.0%, slightly higher than August’s rate of 2.9%. Analysts had anticipated the CPI would hit 3.1%, indicating that the September results fell short of expectations.
The primary drivers of this inflation uptick were significant increases in gasoline and energy prices, which rose by 4.1% and 1.5% respectively. Furthermore, the Core CPI, which excludes volatile items such as food and energy, also came in below forecasts, registering at 3.0% compared to an expected 3.1%.
The data, compiled by the US Bureau of Labor Statistics (BLS), was prepared prior to a government funding halt that may have influenced market sentiment. In response to the inflation report, major US stock indices displayed positive momentum, with the S&P 500 reaching a new all-time high above 6,800 points and the NASDAQ 100 increasing by over 1% during the trading session.
Market participants expressed strong confidence in a potential decrease in the Federal Reserve’s target range for the key interest rate to 3.75-4% in the upcoming October 29 meeting. The probability of this outcome is estimated to be exceptionally high at 96.7%, as indicated by data from the CME.
This anticipated increase in market liquidity typically benefits risk assets, including Bitcoin and other cryptocurrencies. Following the inflation data release, Bitcoin prices initially surpassed $112,000 before experiencing a slight correction. Over the last 24 hours, Bitcoin has seen a 1.2% increase, contributing to a 1.9% rise in the overall cryptocurrency market capitalization.
There are indications from analysts, including CryptoQuant’s Axel Adler Jr., that Bitcoin and the S&P 500 may be entering the late stage of a bull market, hinting at significant movements in both traditional and digital asset classes.
