Bitcoin Tumbles As US CPI Hits 8.2% – Bitcoin Magazine
U.S. inflation for the month of September was up 8.2% year-over-year (YoY), which exceeded market expectations of 8.1%, per the consumer price index (CPI) report. Bitcoin fell close to $18,000 following the data release.
While the latest CPI report shows the fourth month of declining inflation, it is still notable that CPI continues to exceed market expectations. Thus, continued rate hikes could come from the Federal Reserve which tends to drive instruments like risk assets and bitcoin to lower prices.
The highest levels of inflation continued to be reported in the energy sector. For instance, fuel oil saw a 58.1% YoY jump and utility piped services hit 33.1%. Energy commodities also were up 19.7%, while energy services saw a 19.8% increase.
However, core CPI, which is CPI minus food and energy, hit 6.6% YoY –– a new 40-year high. Wages have also seen consistent declines over the past 18-month period which continues to show an economy in struggle.
From a month-over-month perspective, utility piped services rose 2.9% with the largest decrease being fuel and oil at 2.9%.
As inflation continues to decrease in certain sectors and wages seem to have no positive change, bitcoin’s price could possibly see lower prices as rate hikes take hold and borrowing becomes more difficult.
Continued tightening of monetary policy is making change, however the changes arguably are not as drastic as the Federal Reserve needs in order to curb the problem of broader economic constraints. Amid the current economic climate, bitcoin could continue experience further downtrends.