Bitcoin Rises as Markets Digest Inflation Data Ahead of Fed Rate Decision

In brief

• August CPI rose 3.4% year over year and 0.4% month over month, both matching consensus, per Bureau of Labor Statistics data released Friday.
• Core inflation cooled to 2.4% annually, its lowest since 2021, but its 0.3% monthly reading ran hotter than the 0.2% economists forecast.
• Crypto rallied across the board: total market capitalization climbed back near $2.7 trillion, the Fear & Greed Index jumped to 73 (greed) and Bitcoin's daily chart now shows a nascent golden cross.

U.S. inflation data gave the market a mixed bag today, with the core monthly reading coming in hotter than economists had penciled in, but with most numbers generally in line with expectations.

Bitcoin initially dipped on the news, but has since bounced back and is once again nearing $79,000, as the broader market digests what it means for the Federal Reserve’s forthcoming decision on interest rates next week.

The Consumer Price Index rose 3.4% year over year and 0.4% month over month, both in line with consensus, according to Bureau of Labor Statistics data released Friday. It's the same annual rate posted in July.

Core CPI, which strips out food and energy, told a mixed story. The annual core rate cooled to 2.4% from July's 2.5%, its lowest level since 2021. But the monthly core reading came in at 0.3%, hotter than the 0.2% analysts expected, the detail markets zeroed in on.