- The PCE price index rose by 0.2% in September, bringing the annual inflation rate to 2.1%, as anticipated by economists.
- Core inflation exceeded headline rates, increasing to 2.7% from the previous month, indicating underlying price pressures.
- Crypto markets reacted negatively, with major cryptocurrencies like Bitcoin experiencing losses as investors responded to the inflation data.
The core inflation rate in the United States has been on the rise since the beginning of the year and was estimated at 2.1% in September, as expected, thus moving closer to a Fed target. The Federal Reserve target remained attainable in September as the inflation edged slightly, as shown by a Commerce Department report on Thursday. This goal was in the region for the last time in February 2021. While inflation edged higher again, the overall rate fell lower from the previous month, meaning that prices are gradually beginning to level off.
The U.S. announced that the core PCE price index for September was 2.7% YOY, in line with expectations of 2.6% and the previous value of 2.7%. The U.S. core PCE price index for September was 0.3% MOM, in line with expectations of 0.3%, and the previous value was revised from 0.1%…
— Wu Blockchain (@WuBlockchain) October 31, 2024
However, the core inflation index experienced a relative increase to 2.7% from a previous 2.4% in the last month. This has the potential to sustain underlying prices that can affect the Federal Reserve monetary policy processes. During the November meeting, people are going for a lot of conjecture about the possibility of the Fed lowering its benchmark short-term borrowing rate. At the moment, most of the Fed policymakers are in a blackout period, which means that they don’t share their forecast about the economy.
Crypto Market Reaction After Releasing Inflation Data
The released inflation numbers seriously moved the crypto market. While the market was rallying, with Bitcoin reaching $73,000, the highest since mid-March, there were broad-based selloffs. Major cryptocurrencies, including Bitcoin, Shiba Inu, Pepe, Chainlink, Bonk, and WIF, reported losses ranging from 1.7% to 7% over the last 24 hours.
This downturn was triggered by profit-taking and investor reactions to the economic indicators, with subsequent liquidations amounting to approximately $136 million, according to CoinGlass data. As inflation rates continue to be a pivotal factor for risk assets, the crypto community remains vigilant, watching for any signs from the Federal Reserve that could indicate future monetary policy shifts.