PPI Data Sends Shockwaves Through Financial Markets

The recent PPI data release in the US has sent shockwaves through financial markets, pushing up rate hike bets and causing Bitcoin to plummet to $77,000. The August PPI inflation figure came in at 5.4% year-over-year, exceeding expectations of 5.3%, while core PPI rose to 4.6% year-over-year, the highest reading since June 2026.

The hotter-than-expected inflation data added pressure on rate hike expectations ahead of the September 16 Fed meeting. The 10-year Treasury yield crossed 4.90% for the first time since November 2023, up 95 basis points since the Iran War began.

The bond market is pushing back against Washington's attempts to keep borrowing costs down, with yields continuing to climb despite the US Treasury tripling long-term bond buybacks to $6 billion. This has significant implications for Bitcoin and other risk assets, as higher yields make safe government bonds more attractive, pulling money away from riskier assets.

Bitcoin crashed by over $1,200 and dropped below $77,000 immediately after the PPI print, with over $190 million in long positions liquidated in just 60 minutes. This is a stark contrast to the last time PPI data was released, when Bitcoin pumped 26% in eight days.