The soft US inflation data for August is – at least temporarily – pushing crypto prices higher on Wednesday.
The Manufacturer’s price index (PPI)Measuring inflation at wholesale levels, 0.1% month-to-month fell in August, compared to analyst estimates of a 0.3% increase and an increase of 0.9% of last month. Year-over-year, PPI grew 2.6%, down from 3.1%previously and sharp less than forecasts for 3.3%.
The main PPI, which washed food and energy costs, also fell 0.1% in August Verus A forecasts that increased 0.3% and July increased by 0.7%. The year-in-year Core PPI rose only 2.8% against estimates for 3.5% and 3.4% of July.
Reaction to crypto markets is fast, with bitcoin Rising to $ 113,700 at the time of press, earlier than 1% in the past 24 hours. Ether (Et) Rose by a similar value and solana’s sol (Sol) Continued recent outperformance, up to 3.3% to $ 224.
The latest PPI reading follows July Blowout PPI Increase reigned inflation concerns amid a rapid weakening lab. Entrepreneurs will track the consumer price index tomorrow (CPI) The inflation report, a major data point in the asses leading to the Fed’s interest rate decision next week.
“That’s exactly the PPI data that we should cheer on, thinking it will help to suppress CPI inflation, end the recent collapse of the reflation, and allow the Fed to focus clearly on recent weaknesses in the labor market,” said Caleb Franzen, founder of Cubic Analytics, in one X post.
The bulls have a reason to be careful
All things equal -equal, generally assume that the easier financial policy is good for risk ownership, among them.
Last month saw the Federal Reserve Chair Jerome Powell Flip from Hawk to Dove and now a string of weak economic reports that possibly points to the need for a series of bank rate cuts. And yet, Bitcoin struggles – rising as the news from Powell or the reports struck, but then pulling back quickly.
Bitcoin price action is particularly disturbing because gold acts exactly in the way of investing – pushing what seems like new record highs in every fresh news item.
While merchants are constantly hoping that the Fed will cut the rates of 25 basis for next week’s policy meeting points, they will rise bets to a possible 50 basic point point. According to the CME FedwatchThe odds of a 50 point cut now rose to 10% compared to 7% before the PPI report and 0% a week ago.
