The long-delayed U.S. inflation report is finally out, providing investors with fresh data to gauge the economy’s direction after weeks of uncertainty caused by the government shutdown.
The September Consumer Price Index (CPI) rose 0.2% month-over-month, below the 0.35% estimate, while annual inflation stood at 3.0%, slightly lower than the expected 3.1%. Core CPI, which excludes food and energy, also increased 0.2%, marking a gradual slowdown in price pressures.
Inflation Data Signals Moderation
The softer CPI figures suggest inflation may be easing after several months of mixed readings. Gasoline prices and shelter costs continued to rise, but at a more moderate pace, indicating the U.S. economy is stabilizing rather than overheating. Analysts noted that this deceleration could offer some breathing room for policymakers at the Federal Reserve, which is set to hold its next interest rate meeting in early November.
Core inflation – a key metric for the Fed – remains near the 3% mark, showing progress but still above the 2% target. The data collection for September was completed before the shutdown, ensuring that the report reflects pre-lapse conditions and not distortions from the temporary pause in government operations.
Crypto Market Holds Steady
Bitcoin traded around $110,937, up 1.5% in the past 24 hours, while Ethereum gained 1.9% to $3,942. Among major altcoins, XRP hovered near $2.44 and Solana climbed to $191.47, both posting weekly gains above 5%. Despite mild profit-taking, the overall sentiment in the crypto market remained positive as investors digested the latest inflation numbers.
Market watchers say the lower-than-expected CPI could reinforce risk appetite across digital assets, particularly if it influences the Fed to pause or even signal rate cuts later this year. A weaker inflation trend tends to ease pressure on U.S. Treasury yields and the dollar, both of which have historically shown an inverse relationship with Bitcoin.
Traders Eye Fed’s Next Move
With inflation data now out of the way, attention swiftly turns to the Federal Reserve’s upcoming rate decision. Investors are closely watching whether Chair Jerome Powell will maintain current rates or hint at a policy shift. A dovish stance could push Bitcoin and other cryptocurrencies higher, while any sign of hawkishness may trigger short-term volatility.
According to labor market data released earlier this week, jobless claims slightly increased to 227,000, hinting at some cooling in the labor market – another factor that could sway the Fed’s tone.
Market Outlook
If the Fed acknowledges progress on inflation, markets may interpret it as a green light for risk assets, giving Bitcoin and altcoins room to extend their current uptrend. Conversely, a firm stance on maintaining tight policy could keep prices range-bound.
For now, crypto investors seem cautiously optimistic. Bitcoin’s resilience above the $110,000 mark and steady altcoin performance indicate confidence that inflation is finally moving in the right direction – offering hope that 2025’s final quarter may end with renewed momentum across digital assets.
