US consumer prices rose 3.4% in August, matching forecasts and sparking a rebound in Bitcoin and other cryptocurrencies. Core CPI also met expectations, though month-over-month core inflation exceeded predictions. Despite inflation remaining above the Federal Reserve's target, the market reacted positively to the CPI data.
The CPI report provides crucial data for the Federal Reserve's monetary policy decisions. While the headline and core figures met expectations, the slightly higher month-over-month core inflation could influence the Fed's stance on interest rates, despite the positive market reaction in cryptocurrencies.
The U.S. Consumer Price Index (CPI) for August showed an annual increase of 3.4%, matching market expectations. On a monthly basis, CPI also rose by 0.4%, aligning with forecasts. Core CPI, which excludes volatile food and energy prices, registered a 2.4% year-over-year increase, its lowest level since 2021. However, the month-over-month core CPI figure of 0.3% was higher than the anticipated 0.2%. This inflation report follows a Producer Price Index (PPI) release that showed a 5.4% year-over-year increase, exceeding expectations and causing a market downturn. Despite ongoing concerns that inflation remains significantly above the Federal Reserve's 2% target, the Bitcoin price experienced a rebound following the CPI data. The leading cryptocurrency rose from below the $77,000 mark to trade above $78,000. Other digital assets also saw gains, with Ethereum reclaiming the $2,500 level and Solana moving back above $100.