Crypto market observers are keenly awaiting the US inflation report for September, which is anticipated to exceed 3% for the first time in 2025. This report is likely to have significant implications for the cryptocurrency markets.

The US Bureau of Labor Statistics is set to publish the Consumer Price Index (CPI) for September, delayed due to a government shutdown now in its 24th day.

Economists are predicting that inflation increased by 0.4% month-over-month and reached an annual rate of 3.1%. This would signify the first occurrence of the CPI exceeding 3% this year, as per Trading Economics.

Potential CPI Impact on Cryptocurrency

This CPI report marks the first substantial data release since the beginning of the government shutdown earlier this month. Investor Ted Pillows noted that if the CPI comes in above 3.1%, the likelihood of a rate cut diminishes; conversely, if it’s 3% or lower, “it’ll be good for the markets.”

“Rate cuts will happen, and also the MoM increase in CPI will be just 0.1% or 1.2% annualized. This will also boost chances of more rate cuts and will cause liquidity to flow into risk-on assets.”

Matt Maley, chief market strategist at Miller Tabak, stated, “We realize that the Fed has said that their focus is now on the employment picture, but whether tomorrow’s CPI data is a lot different than expectations or not could still have an impact on their thinking.”

“So, it will still have a big impact on the markets if it is indeed out of line with what the consensus is thinking."

Despite potential high inflation numbers, it is unlikely to sway the Federal Reserve from executing rate cuts, especially given the focus on the weakening labor market.

Market Movements

The total crypto market capitalization has increased by 1.8% in the last 24 hours, reaching $3.8 trillion. Bitcoin (BTC) led the rise, briefly touching $111,000 in late trading before retreating to approximately $110,500.