Bitcoin Surges Above $85,000 as Inflation Report Triggers Rate Hike Odds Plunge

Bitcoin has broken above the $85,000 level after a sudden surge in price. According to CoinGecko data, the leading cryptocurrency is up by 1.8%. This rally is largely attributed to a softer-than-expected inflation report released earlier this week.

The Personal Consumption Expenditures Price Index increased 3.4% year over year in August, which was lower than the expected 3.7%. The month-over-month figures were also mild, with an increase of only 0.3%. This has led to a decrease in expectations for further monetary tightening by the Federal Reserve.

The recent report has pushed down rate hike odds, with CME FedWatch pricing showing that the probability plunged from 70% to 51.5%. The odds have now dropped below 50%, following the inflation data release. This has contributed to the surge in Bitcoin's price.