Hot September CPI Sends Bitcoin Lower as Rate Hike Bets Return

US inflation sped up more than expected in September, and it could put more Federal Reserve rate hikes back on the table. The Bureau of Labor Statistics said consumer prices rose 0.6% on the month, matching forecasts and up from 0.4% in August. Year over year, CPI climbed 3.7%, above the 3.6% estimate and August’s 3.4%. Core CPI, which leaves out food and energy, gained 0.3% in September, the same as August but above the 0.2% forecast. On an annual basis, core inflation reached 2.6%, compared with 2.4% a month earlier and an estimate of 2.5%.

Bitcoin Price Falls After Inflation Data

Bitcoin dropped about $1,000 on the news, moving from roughly $83,200 to $82,800. Hotter inflation keeps the Fed hawkish and strengthens the case for another hike, which is seen as bearish for bitcoin and gold in the short term.

Fed Rate Hike Expectations for December

Before the release, several Fed speakers had hinted that the central bank would likely raise rates another 25 basis points before the end of the year. Markets were pricing in a pause at the meeting later this month and a hike at the final meeting in early December.