US CPI inflation in the United States comes in at 2.9%, as it rises 0.4% in August, after remaining at 2.7% in June and July.
However, the U.S. Federal Reserve will resume interest rate cuts next week after the latest jobs data signaled a weaker labor market in the United States.
Meanwhile, the Trump administration pushes for larger Fed rate cuts after PPI inflation cooled significantly.
Bitcoin price slightly rebounded on Thursday, but traders braced for uncertainty, seasonal weakness, and options expiry. Whereas, Ethereum price holds above $4,400 after the key CPI release.
US CPI Inflation Comes in Higher-Than-Expected at 2.9%
On September 11, the U.S. Bureau of Labor Statistics released the August Consumer Price Index (CPI) inflation data. The data prompts the Federal Reserve to resume rate cuts.
The US CPI inflation comes in at 0.4% month-over-month (MoM) in August, above economists’ estimate of 0.3%, but down from 0.2% in the previous month.
The headline CPI inflation increased to 2.9%, after 2.7% in July. Whereas the Core CPI, excluding the food and energy prices, rises 0.3%, the same as in the prior month.
The annual core CPI remains steady at 3.1%, as estimated by economists. Wall Street giants such as JPMorgan, Bank of America, and Goldman Sachs expected CPI to rise to 0.32%, holding the 12-month rate steady at 3.1%.
Goldman Sachs, Citadel Securities, and Pantheon Macroeconomics gave the highest estimate of 0.36%.
Moreover, they estimated the headline CPI to come in at 0.36%, which would print annual CPI higher at 2.9%.
At the time of writing, the CME FedWatch showed more than 92% probability of a Fed rate cut by 25 bps on September 17. Moreover, traders also expect the odds of three rate cuts this year.
At the time of writing, the US dollar index (DXY) showed volatility and rose to 98, rising above the level for the first time since last week.
Also, the 10-year US Treasury yield slipped lower at around 4.002%, the level last seen in April after the key US CPI economic data release.
Bitcoin Price Turns Slightly Volatile
BTC price turned volatile after the CPI inflation data was slightly hot. The price was trading near $113,920, with a 24-hour low and high of $113,181 and $114,4713, respectively.
However, the trading volume dropped further over the last 24 hours, indicating uncertainty among spot traders.
Headwinds such as bearish technical patterns, seasonal weakness, and options expiry persist for BTC. This could boost appeal for altcoins such as Ethereum, XRP, and Solana.
Analyst Ted Pillows pointed out that current price action is exactly mimicking past CPI price action. In the last three CPI data releases, Bitcoin rallied before CPI data and dumped right after the data release.
This time, BTC rallied before today’s CPI data release, which means a dump was imminent.
Popular analyst Michael van de Poppe predicted that Bitcoin price will hold above support around the $112.5K area.
If that turns from resistance to support, then the crypto market will recover and altcoins will witness more strength.
