Cryptocurrency Markets Whipsaw on Mixed Inflation Data and Surging Oil Prices
The latest inflation data released by the US government showed a surprisingly low increase in core PCE prices, which led to a mixed reaction from traders. The data showed that core PCE prices rose just 0.2% in August against a 0.3% forecast, with the year-over-year reading at 3.0% versus the 3.3% estimate.
Bull Theory noted that the BLS changed how it measures advisory fees, software, and legal services, which analysts estimate cut up to 20 basis points off core PCE. However, he argued that the cooler reading isn't purely a methodology artifact.
The mixed signals from the inflation data may be contributing to the recent volatility in cryptocurrency markets. Bitcoin (BTC) pared back its gains after initially surging above $85,000, while XRP (XRPUSD) was up 0.5% after tagging $1.54.