The highly anticipated US Producer Price Index (PPI) data showed inflation was higher than expected at 1.8% in September, compared to market expectations of 1.6%. This rise in inflation figures, especially after the latest US Consumer Price Index (CPI) data, has raised concerns in the market about its impact on BTC and other cryptocurrencies. Moreover, this gloomy set of economic data has fueled a debate over whether or not the US Federal Reserve will once again move with tighter monetary policy.
The latest data from the Department of Labor showed that US PPI inflation rose to 1.8%, up from the 1.7% level recorded in August. On a monthly basis (MoM), inflation remained unchanged at 0.0% after rising 0.2% in the previous month.
At the same time, Core PPI inflation rose sharply to 2.8% last month, up from market expectations of 2.6% and the 2.4% level in August. On a MoM basis, the Core PPI figure, which excludes food and energy prices, stood at 0.2%, compared to 0.3% in the previous month.
This higher-than-expected inflation figure has sparked discussions in the wider financial sector. The latest US CPI data also exceeded market forecasts, signaling a possible tighter stance by the US Federal Reserve at their meeting next month.
The latest US PPI data has weighed on investor sentiment, suggesting that inflation in the country is rising again. This raised concerns about a possible drop in the price of Bitcoin, sparking a debate over whether or not the Federal Reserve will implement a smaller interest rate cut at its upcoming central bank meeting.
However, the price of BTC is almost flat at the time of writing, with the price sitting at $62,000. Its trading volume increased by 6% to $30.4 billion, and this major cryptocurrency has reached a high of $61,383 and a low of $58,895 in the last 24 hours.
After today's inflation data, the US 10-Year Bond Yield rose 0.34% to 4.109, while the US Dollar Index slipped 0.03% to $102.737. Meanwhile, according to the CME FedWatch Tool, there is an 88% probability of an interest rate cut of 25 basis points (bps) by the Federal Reserve at the next meeting, while the remaining 12% expect no rate cut. Previously, the market expected a larger interest rate hike of 0.5% by the US Federal Reserve.
The latest US jobs data and inflation figures have raised concerns about a possible tighter stance by the US Federal Reserve at its next meeting. Now, the market will closely monitor the Fed's policymakers' comments for clues about the central bank's next steps on their interest rate plans.