Weeks after it was expected to be released, the U.S. inflation report has finally emerged. Notably, this report was facilitated under unique circumstances, as some Department of Labor staff were deemed exceptions during the shutdown, allowing this single report to be issued. The data provided crucial insight into the financial landscape.
U.S. Inflation Report Details
Next Wednesday, the Federal Reserve is set to announce its new interest rate decision, with expectations pointing towards a 25 basis point cut. However, the 5% increase in oil prices due to sanctions on Russia exerts an upward pressure on inflation. Moreover, if the U.S. and China fail to reach an agreement by November 1 (the October 30 Trump-Xi meeting being the last chance), product prices are expected to rise further. The U.S. anticipates imposing a 155% tariff, which China is likely to counter. This reciprocal restriction on exports will amplify inflationary pressure.
Thus, it was crucial to confirm the tariffs’ impact on inflation as indicated by the end-of-month PCE figures. The announced numbers are as follows:
- Core CPI Monthly Announced: 0.2% (Expectation and Previous: 0.3%)
- Core CPI Announced: 3% (Expectation and Previous: 3.1%)
- CPI Monthly Announced: 0.3% (Expectation and Previous: 0.4%)
- CPI Announced: 3% (Expectation: 3.1%, Previous: 2.9%)
Impact on Crypto Markets
The inflation figures came in lower than expected, which bodes well for cryptocurrencies. PCE data was confirmed, and the forthcoming rate cut on Wednesday is now certain. Consequently, BTC is advancing toward $112,000.
