U.S. Inflation Pressures Ease
The latest data from the US Department of Labor shows that core consumer prices, excluding food and energy, have dropped to the lowest level in two years. This has cast doubt on the Federal Reserve’s plans to raise interest rates soon. The overall consumer price index for October was 3.2%, much lower than September’s 3.7% and below the market expectation of 3.3%. Compared to the previous month, inflation was flat in October, down from 0.4% in September and 0.6% in August.
Core inflation slowed to 4.0%, the weakest since 2021, while the monthly increase of 0.2% was also in line with analysts’ forecasts. As a result, the S&P 500 rose 1.9%, and the Nasdaq is up 2% at the time of writing.
Bitcoin has lost around 0.5% of its value over the last 24-hour period, currently trading at around $36,000 per coin with a year-to-date performance still around 119%. The data also pushed down the yields of U.S. Treasury notes, with the 10-year note yield falling by 17 basis points to 4.457% and the 2-year note yield dropping by 19 basis points to 4.849%. The U.S. Dollar Index (DXY) also experienced a correction of around 1.16% to 104.41 from around 105.56.
Federal Reserve Expectations
The market now expects the Federal Reserve to keep its key interest rate unchanged at its next meeting in December, according to the CME Group’s FedWatch tool.
Hot Take: U.S Inflation Data Affects Bitcoin and Market Yields
Last month’s U.S inflation data showed a decrease in core consumer prices, casting doubt on plans by the Federal Reserve to raise interest rates soon. This has impacted Bitcoin’s value and market yields, with implications for future economic decisions.
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