Bitcoin slides as hotter U.S. inflation lifts Fed rate‑hike odds to 47%

Opening

Bitcoin fell after hotter‑than‑expected U.S. inflation data raised the probability of another Federal Reserve rate increase in October. September consumer prices climbed 3.7% from a year earlier, up from 3.4% in August, while core inflation—which strips out food and energy—rose to 2.6% from 2.4%. The report sent expectations for an October Fed hike from about 20% before the release to roughly 47%, and pushed Treasury yields higher.

Key points

• September CPI annual rate: 3.7% (up from 3.4% in August)
• Annual core CPI: 2.6% (up from 2.4%)
• October Fed hike odds: ~47% (up from ~20%)
• Bitcoin intraday low: about $81,588 on Oct. 14

What the BLS report shows

The Bureau of Labor Statistics release reported a 0.6% month‑month rise in headline CPI, driven largely by a 9.1% jump in gasoline prices. Core CPI rose 0.3% month‑month, matching August but above the 0.2% forecast. The data beat analysts’ expectations for both headline and core readings.

Fed’s September policy move

The Federal Reserve raised its target rate range to 3.75‑4.00% on Sept. 16. Policymakers are scheduled to meet again on Oct. 27‑28. The inflation surprise makes another quarter‑point hike more likely, according to money‑market pricing from LSEG.

Why this matters for Bitcoin

Higher Treasury yields make interest‑bearing dollar assets more attractive, creating pressure on a non‑yielding asset like Bitcoin. The article notes that even if the Fed holds rates steady in October, the higher yields could weigh on Bitcoin as investors compare returns.

What happens next

Markets are watching the Oct. 27‑28 Fed meeting for any signal on further tightening. The two‑year Treasury yield has risen to 4.872%, and the dollar has gained against major currencies, indicating that the inflation surprise is reshaping rate expectations heading into the meeting.

Sources

• CryptoSlate – Surging dollar forces Bitcoin sell‑off as rate hike odds double

Read also: Bitcoin drops below $82,000 as inflation data raises rate hike fears