US Inflation Hits 3.7%, Sinking Bitcoin and Gold: Will the Fed Hike in October?

US consumer prices rose 3.7% in the year to September, above the 3.6% forecast, and Bitcoin and gold fell within minutes. The hotter reading raises the odds of another Federal Reserve rate hike, which would lift borrowing costs.

Core inflation, which strips out volatile food and energy prices, also beat forecasts at 2.6%, against an expected 2.5%. Both measures climbed from August's readings of 3.4% and 2.4%.

How Bitcoin and Gold Reacted to Hot Inflation Data

Bitcoin (BTC) dropped from about $83,860 to as low as $82,731 in the five minutes after the 8:30 a.m. ET release, Binance data on TradingView shows. It then steadied near $83,125.

Gold fell from $4,153 to $4,117 an ounce in the same window.

Higher rates tend to pull money away from assets that pay no interest, such as gold, and riskier bets like crypto. The US dollar already sits near an 18-month high.

The Consumer Price Index (CPI) tracks what households pay for everyday goods and services. The Bureau of Labor Statistics (BLS) publishes it every month. In August, gasoline cost 27.4% more than a year earlier, BLS data shows.

Core inflation shows whether rising prices are spreading beyond fuel and groceries. That is the measure the Federal Reserve watches most closely when setting interest rates.