Bitcoin Surges Above $85,000 After Soft Inflation Report

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Summary · why it matters

Bitcoin has surged back above the $85,000 level, rising 1.8%, according to CoinGecko data. The rally was primarily driven by a surprisingly soft inflation report, with the Personal Consumption Expenditures Price Index up 3.4% year over year in August versus analyst expectations of 3.7%, while the month-over-month headline figure rose 0.3%. Roughly $50 million worth of Bitcoin positions were liquidated over the past hour, with short positions accounting for $48 million of that wipeout, according to CoinClass. Expectations of an upcoming Federal Reserve rate hike have taken a hit, with CME FedWatch pricing showing the probability of another quarter-point hike at the Oct. 27-28 meeting plunging from 70% to 51.5% after New York Fed President John Williams said there was no need for urgency, and the odds have now fallen well below 50% following the inflation report. Earlier this week, Bitcoin had dropped below $85,000 on expectations of further monetary tightening, after the Fed announced its first rate hike in years on Sept. 16.

Impact on assets 3

Others▼ · 2 stocks
％Effective Federal Funds Rate
EFFR
▼ NegativeMonetaryrelevance

Soft inflation and Williams' dovish remarks cut the probability of another quarter-point hike from 70% to below 50%, pushing the expected policy rate lower.

Others▲ · 1 stocks
Bitcoin
BTC-USD
▲ PositiveMonetaryrelevance

Soft PCE inflation report and falling odds of a Fed rate hike weaken the dollar/rate outlook, driving Bitcoin above $85,000.

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