Bitcoin Surges Past $85,000 as US Inflation Cools to 3.4%
US inflation cooled to 3.4% in August, below forecasts of 3.7%. The personal consumption expenditures (PCE) price index measures what Americans pay for goods and services, with the Federal Reserve watching it closely.
Bitcoin topped $85,000 within an hour as gold jumped about $20 in minutes following the release of new US inflation data on Wednesday. Markets had priced a 72.5% chance of an October Fed rate hike before the report came out.
Growth data released at the same time pointed the other way, with Gross domestic product (GDP) growing at a 2.2% annual rate in the second quarter, beating forecasts of 1.5%. Households also spent more, with consumer spending adjusted for inflation jumping 0.6% in August.
The softening inflation reading may chip away at the case for the next Fed hike, which could be a bullish sign for Bitcoin and gold. However, strong GDP growth and increased consumer spending could still keep a rate hike in play ahead of the October meeting.