US Inflation Cools: BTC Price Jumps on PPI Data

BTC Reacts as U.S. PPI Drops Sharply

Bitcoin experienced a notable price increase following the release of U.S. Producer Price Index (PPI) data, which came in significantly lower than expected. This has fueled speculation of potential Federal Reserve rate cuts as inflation appears to be cooling down.

Traders are now pricing in a higher probability of a substantial 50 basis point (bps) rate cut by the Fed.

PPI Data Highlights

• The Bureau of Labor Statistics reported that the PPI fell to 2.6% year-on-year (YoY) in August.
• This figure is well below the expected 3.3% and the previous reading of 3.3%.
• Monthly PPI data also surprised, coming in at -0.1%, below expectations of 0.3%.

Core PPI Details

• The core U.S. PPI, which excludes volatile food and energy prices, registered at 2.8%.
• This is lower than the anticipated 3.5% and the previous 3.7%.
• The core PPI also saw a monthly decrease of -0.1%, falling short of the projected 0.3%.

This data provides relief to market participants who were concerned about potentially persistent inflationary pressures.

Bitcoin's Price Surge

In response to the encouraging inflation data, Bitcoin's price surged past the $113,000 mark. Current trading data indicates Bitcoin is holding around $113,200.

Bitcoin had already climbed from an intraday low of $110,700 prior to the PPI data release.

The data suggests a potentially bullish outlook for Bitcoin and the broader cryptocurrency market, driven by the increased likelihood of the Fed adopting a more accommodative monetary policy, with some analysts predicting a possible 50 bps rate cut instead of the previously anticipated 25 bps cut.