Bitcoin, Gold Prices Soar on Cooler US Inflation Data
US inflation data released on Wednesday showed that personal consumption expenditures (PCE) price index rose 3.4% from a year earlier, below forecasts of 3.7%. The Federal Reserve's preferred inflation gauge has been closely watched by traders and policymakers.
Bitcoin jumped to over $85,000 within an hour of the release, while gold prices increased by about $20. Markets had priced in a 72.5% chance of an October Fed rate hike before the data was released.
The cooling inflation reading may reduce the likelihood of another interest rate increase this year. The Federal Reserve raised rates by 0.25% to a 3.75-4.00% range on September 16, and 16 out of 18 officials projected at least one more hike before year-end.
However, strong GDP growth data released alongside the inflation reading pointed to continued economic expansion. The US economy grew at a 2.2% annual rate in the second quarter, beating forecasts of 1.5%. Consumer spending adjusted for inflation jumped 0.6% in August, the largest monthly gain since March 2025.