Bitcoin Surges as Soft US Inflation Data Eases Bond Market Pressure

Bitcoin's price has been pushed back towards $85,000 after US inflation data was released. The Bureau of Economic Analysis said that the PCE price index rose 0.3% in August, while core PCE increased 0.2%. This is seen as a positive development for Bitcoin because it eases pressure from the bond market.

The report also included annual revisions reaching back to 2021, which makes comparisons with previously published figures less straightforward. However, inflation did not suddenly collapse, but the monthly figures were soft enough to change the rate narrative at a moment when markets had been preparing for another potentially hawkish Federal Reserve decision.

Treasury yields have given Bitcoin room to recover after falling from about 5.234% to roughly 5.203%. The two-year yield dropped from 4.881% to around 4.845%, and expectations for another Fed rate hike in October declined after the data.

However, the report was not entirely dovish as consumer spending jumped 0.9% in August, while real PCE rose 0.6%. This means that demand in the US economy remains strong, which can keep inflation sticky and gives the Fed less reason to rush toward easier policy.