How Did Bitcoin and Markets Respond to Inflation Data? Have FED Expectations Changed?

US inflation data was announced yesterday before the FED interest rate decision to be announced next week.

While headline inflation was above expectations, core inflation was in line with expectations.

Consumer price index Monthly: Announced 0.6% – expectation 0.6% – previous 0.2%

Consumer price index Annual: Announced 3.7% – expectation 3.6% – previous 3.2%

Core Consumer Price Index monthly: Announced 0.3% – expectation 0.2% – previous 0.2%

Core Consumer price index Annual: Announced 4.3% – expectation 4.3% – previous 4.7%

Although the CPI data showed a slight increase, it was received calmly by the markets. While the US 10-year and 2-year bonds continued their horizontal course with little change, there was a similar picture in the US stock markets.

The FED constantly emphasizes that it will determine its next move in monetary policy based on data and that it does not have an agenda. For this reason, investors closely follow inflation data. However, it seems that the latest inflation data exceeding expectations did not make a significant difference in terms of market expectations.

According to CME FED Watch, despite inflation data coming in above expectations, the probability of no interest rate increase in September is priced at 97%. Interest rate increase expectations for the FED meeting in November are in a more balanced position at 40%.

The lack of any increase in core inflation may have been effective in keeping expectations unchanged.

While the markets welcome the inflation data calmly, we see that the $ 26,000 level is maintained on the Bitcoin side.

US PPI data will be announced today at 15.30 GMT. Before the FED interest rate decision, markets will closely follow the CPI data and the PPI data.