CoinDesk
U.S. CPI rose 0.6% in September, up from 0.4% in August and matching forecasts, while annual inflation accelerated to 3.7% from 3.4%, above the 3.6% estimate. Bitcoin fell sharply after the hotter-than-expected inflation report.
Core CPI, which excludes food and energy, increased 0.3% monthly, matching August but exceeding the 0.2% forecast. Annual core inflation rose to 2.6% from 2.4%, also above expectations of 2.5%.
Why it matters
The report strengthens the case for keeping monetary policy restrictive. Before the release, Fed speakers had signaled that another 25-basis-point rate increase before year-end was possible. The hotter inflation figures put multiple hikes back into discussion, complicating expectations for a pause at the Fed’s upcoming meeting.
Market impact
Bitcoin’s sharp decline reflects the sensitivity of risk assets to interest-rate expectations: persistent inflation can keep borrowing costs higher and reduce the appeal of assets perceived as riskier. Market pricing had pointed to a pause at the Fed’s meeting later in September and a hike at its final meeting of the year in early December. The CPI report puts that path under renewed scrutiny, though it does not determine the Fed’s decision.
Frequently asked questions
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How much did U.S. CPI rise in September?
Headline CPI increased 0.6% from August and 3.7% year over year. The annual figure was up from 3.4% in August and above the 3.6% forecast.
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What did September core CPI show?
Core CPI rose 0.3% monthly, above the 0.2% forecast. Its year-over-year increase accelerated to 2.6% from 2.4%, exceeding the 2.5% estimate.
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Why did Bitcoin fall after the inflation report?
The hotter inflation figures revived concern that the Federal Reserve could raise rates multiple times. Higher-rate expectations can weigh on risk appetite, and Bitcoin fell sharply after the report.
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What rate path had markets expected before the CPI release?
Market pricing pointed to a pause at the Fed’s upcoming meeting and a 25-basis-point hike at its final meeting of the year in early December.
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Does the September CPI report guarantee a Fed rate hike?
No. The report puts multiple rate hikes back into discussion and challenges expectations for a pause, but it does not determine the Fed’s decision.
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