The US government released inflation data for September this afternoon. Inflation in the United States fell to 2.4%, slightly higher than the expected 2.3%. The decline is another positive step towards inflation control, but there are mixed signals. Despite the decline in headline inflation, core inflation – which excludes fluctuating items such as food and energy – rose to 3.3%. These developments have also had a direct impact on the price of bitcoin (BTC), which briefly fell below $61,000.
Inflation continues to fall, but remains above expectations
The CPI inflation rate for September fell by 0.1% to 2.4%. This figure was above analysts’ expectations, which expected a decline to 2.3%. Although inflation is decreasing, the situation remains complex.
Experts suggest that this downward inflation trend, which has now continued for six months in a row, may pave the way for another rate cut in October. Such a decision could relieve pressure on consumers and investors, leading to a more stable economic outlook, including in the crypto market.
BTC price responds to inflation figures
The new inflation data also had a direct impact on the crypto market. The BTC price saw a price drop of almost 2% and fell below $61,000. However, the price soon stabilized. At the time of writing, the king of cryptocurrencies is still around $61,000.
Despite the small dip, investors remain optimistic as inflation is expected to decline further in the coming months. Should this downward inflation trend continue, it could create a favorable environment for further increases in the price of bitcoin and other cryptocurrencies.
CPI coming in slightly higher than expected, but that’s not a big deal.
Unemployment claims, however, just printed the highest number since June ‘23 with 258K.
Probably the rumours about QE & more rate cuts will strengthen —> positive for #Bitcoin.
— Michaël van de Poppe (@CryptoMichNL) October 10, 2024
While inflation continues to decline, the rise in core inflation remains a concern. If this trend continues, policymakers may remain reluctant to lower interest rates. This would mean that the pressure on both the financial markets and the crypto market continues. Still, the prospect of declining inflation remains a positive signal for many.
The coming months will be crucial for both the financial and crypto worlds as policymakers consider their next steps to get inflation under control. For the time being, it is still expected that the US central bank will further cut interest rates this month. In principle, today’s new inflation numbers, while slightly disappointing, are still good news for bitcoin investors.
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