U.Today – The Fed’s core inflation rate hit 2.1% in September, in line with expectations, bringing it closer to the Fed’s target. Inflation rose slightly in September, approaching the Federal Reserve’s target, according to a Commerce Department report released Thursday.
The personal consumer spending price index rose a seasonally adjusted 0.2% for the month, while the 12-month inflation rate was 2.1%, in line with Dow Jones projections.
PCE data serves as the Fed’s main indicator of inflation, while policymakers also monitor other measures. Fed policymakers aim to keep inflation at 2% annually, a level not reached since February 2021. The key interest rate for September fell 0.2 percentage points from August.
However, the core inflation rate was 2.7%, an escalate of 0.3% compared to the previous month. The data comes as markets are betting heavily that the Fed may cut its benchmark short-term interest rate at its meeting next week.
Here’s how the cryptocurrency reacted
The release of the key inflation rate coincided with profit-taking in the cryptocurrency market after a rally that reached $73,000, the highest level since reaching an all-time high of $73,750 in mid-March.
As investors analyze the latest economic data, cryptocurrencies are trading in the red, with significant losses being reported around the world. Bitcoin, Pepe, Chainlink, Bonk and WIF have seen losses ranging from 1.7% to 7% in the last 24 hours.
The sale triggered a wave of liquidations worth about $136 million, according to CoinGlass data.
Inflation rates are a solemn concern for cryptocurrency markets, especially because they can influence the Federal Reserve’s monetary policy decisions. A lower inflation rate could indicate looser policies, sparking optimism among cryptocurrency investors who see it as a potential price booster, while high inflation rates remain unfavorable for risky assets, including cryptocurrencies.
In the coming days, the market will likely pay close attention to any indication from the Fed about its next policy actions. Policymakers are currently in a “standstill period” ahead of the November 6-7 meeting, meaning they will not provide comments based on data releases or their overall political and economic expectations.
