Softer Inflation Reading Reduces October Rate Hike Bets
The crypto market remains stable due to expanding institutional access, including ETFs and tokenized Treasuries. However, elevated yields and persistent inflation keep the backdrop uncertain.
A softer-than-expected reading of the Federal Reserve's preferred inflation gauge has reduced expectations for another interest rate hike in October, potentially providing a tailwind for bitcoin and other risk assets.
The latest PCE price index for August showed headline inflation rising 0.3% from July and 3.4% year-over-year, while core PCE rose 0.2% month-over-month and 3% annually.
Brendan Ma, head of investment strategy at the Arbitrum Foundation, said a 0.2% monthly rise in core PCE prices is welcome news for the Fed, which could reduce pressure for an October hike if September CPI points the same way.