August CPI Report Sparks Rate Hike Concerns, Crypto Market Remains Nervous

The US August Consumer Price Index (CPI) report met expectations, clocking in at 3.4% year-over-year and 2.4% for core CPI.

However, the market's initial reaction was a crash across assets including Bitcoin, gold, stocks, and bonds before quickly recovering.

Fundstrat's Tom Lee had predicted a soft Core CPI print that would keep the Fed on hold, but the hotter-than-expected numbers raised concerns about persistent inflation and put a September rate hike back under consideration.

The sharp V-shaped recovery in gold and stock futures suggested temporary relief, but the Crypto market remained nervous with Polymarket odds climbing to around 79% for a September interest rate hike.