Bitcoin Falls as Hot Inflation Puts a Fed Hike Back on the Table

In brief

• U.S. consumer prices rose 3.7% year over year in September, above the 3.6% forecast, as gasoline jumped 9.1% in a single month.
• Odds of an October Fed rate hike roughly doubled from 22% after the report, and the 10-year Treasury yield climbed to about 5.3%.
• Bitcoin fell 1.5% to $82,142 and is holding the $81,847 to $82,305 Fibonacci golden zone, with $81,603 as the next support.

Bitcoin fell 1.5% to $82,142 on Wednesday after U.S. inflation came in hotter than expected, dragging most of the crypto market down with it. Ethereum dropped 2.8% to $2,440, Solana lost 1.9% and XRP slid 1.3%, while total crypto market cap shed 0.7% to $2.8 trillion.

The Consumer Price Index rose 0.6% in September and 3.7% over the past year, up from 3.4% in August, per the Bureau of Labor Statistics. Economists expected 3.6%. Gasoline prices jumped 9.1% in a single month and accounted for more than half of the increase.

Core CPI, which strips out volatile food and energy prices, rose 2.6% annually against a 2.5% forecast. That is the reading the Federal Reserve watches most closely, since it shows whether price pressure is spreading into rent, airfares, and services.

Expensive gasoline starts with expensive oil, which has traded above $90 a barrel for most of the past two months amid the war between the U.S. and Iran. Pricier fuel raises the cost of shipping and producing almost everything.