Bitcoin and ether up as U.S. inflation data below estimates at 7.7% in October

U.S. inflation is showing signs of cooling down as crypto markets remain tumultuous. 

Inflation in the U.S. came in at 7.7% in October. Based on FactSet data, analysts had predicted an 8% increase in October. The month-on-month increase was 0.4%. In September, inflation increased by 0.4% month-on-month from August. 

The Fed said last week it might slow the rate of its interest rate increases going forward. However, Fed Chair Jerome Powell did note that the eventual rate reached may be higher than initial estimates. The next Fed meeting is Dec. 14. 

source: bls.gov and federalreserve.org

Interest rate traders are now pricing in an 80% chance of a 50 basis point increase at the December meeting, according to the CME’s FedWatch tool. 

Bitcoin was trading at $17,431 in early trading, according to data via Coinbase. The leading cryptocurrency by market cap gained over 5% since the inflation data was released. Ether gained 7% in the hour since, trading at $1,295.

Crypto markets have been dominated by news of Sam Bankman-Fried’s exchange this week, after it came under scrutiny last week when a balance sheet relating to Alameda Research — a trading shop he also owns — was leaked.

The balance sheet showed significant liabilities and holdings of FTT, FTX’s exchange token. Selling pressure from Binance of FTT on Sunday increased the heat on FTX and Bankman-Fried’s trading arm. By Tuesday, Binance had entered an agreement to acquire the struggling exchange — the deal was off by Wednesday after a review of FTX’s finances.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.