US Inflation Data Release: Implications for Bitcoin's Future

The shutdown of the US government has now reached its 24th day, making it the second-longest on record, just shy of the 35 days during Trump’s first term. Currently, about two million workers have had their payments stopped, with 900,000 on furlough.

Several government sectors are falling behind on the release of critical data, notably, the Consumer Price Index (CPI) data for September. This data is essential for the Federal Reserve’s future actions, and its release is anticipated later today amidst market volatility concerning Bitcoin (BTC), which is currently sitting at $111,000.

Are We in for Surprises?

Experts expect consumer prices to have risen for the second month in a row, noticeably impacting the tariff-sensitive goods sector.

“The government shutdown may have altered the September CPI release date, but it hasn’t changed the stubborn state of inflation. Beneath the surface, we expect goods inflation to stay elevated due to continued tariff pass-through, while an easing in primary shelter costs should help cool services inflation.”
— Sarah House, Senior Economist at Wells Fargo

In commentary from Bitfinex Analysts:

“We will be watching core CPI and the services ex housing split first because a monthly beat above roughly 0.35 percent or a core print drifting above 3.2 percent year on year will lift real yields, strengthen the dollar and cool risk appetite, while a softer print below about 2.8 percent year on year or a weaker monthly pace will revive rate cut expectations and spark a risk-on move.”

Despite impending risks arising from inflation trends, there are still anticipations that the Federal Reserve will reduce the key interest rates soon.

Price Trajectories for Bitcoin

Recall from previous analyses that BTC’s price often reacts considerably following CPI updates. Last month’s CPI release showed surprising stability in Bitcoin, with various experts predicting further southbound movements if the upcoming report shows higher prices than expected.

$BTC bounced back from the $106,000 - $107,000 support zone again.
“The CPI report due tomorrow could have significant bullish implications for Bitcoin, especially if the numbers are lower than anticipated. Conversely, a higher print could lead to further market declines.”
— Ted (@TedPillows)

As we await the CPI data release today, expect fluctuations throughout the crypto markets, with BTC likely to react when the information becomes public. Stay updated!