Bitcoin Sinks After US CPI Report Shows Inflation Hotter Than Expected – Yahoo Finance

U.S. consumer prices in September slowed from the prior month, the Labor Department reported Thursday, but the inflation rate was still faster than what economists had predicted.
Bitcoin (BTC) tumbled nearly 3% in the minutes after the report to its lowest level since Sept. 21. As of press time, the largest cryptocurrency by market value was changing hands at around $18,400. Crypto traders track monthly inflation figures closely, because the Federal Reserve’s efforts to temper soaring inflation have pushed down prices for financial assets seen as risky, from stocks to bitcoin.
The Consumer Price Index report – the most widely watched gauge to track inflationary pressure in the U.S. – rose 8.2% in September from the same month a year ago, slightly higher than the 8.1% forecasted by economists. The index rose 0.4% from August.
The "core" CPI, which strips out volatile energy and food prices and is more closely watched by investors and policymakers because it’s seen as a more steady indicator of underlying price pressures, rose 0.6%, the same pace as it rose in August, well exceeding expectations. The core CPI rose 6.6% from a year ago to its highest level in four decades.
When some prices fall, others rise. While the price of gas, which was the main driver for high inflation in recent months, cooled off further, prices for other items offset price decreases and kept overall inflation at a high level.
Health insurance, for example, was up 28% year over year, which is the largest increase ever. Similarly, groceries were 13% more expensive than a year ago and rent prices surged 7.2%, the highest in four decades.
And even though gas prices slightly fell in September, economists expect energy to pick up again in coming months as to the Organization of the Petroleum Exporting Countries announced it would cut production by 2 million barrels a day, which might drive up prices again.
Investors should be attentive to “continued divergence in direction between headline and core measures as compared to prior periods,” Michael Weisz, president of Yieldstreet, said. “Core categories, such as housing costs, tend to be ‘stickier’ in terms of price movements, and can give insight into future inflation expectations.”
Central bankers have raised interest rates five times this year so far, by a total of 300 basis points, or 3 percentage points, in an effort to bring inflation down to 2%, but they have a long way to go. In a survey conducted by Bankrate, 43% of economists said they think that inflation hasn’t peaked yet and will be more significant over the next 12 to 18 months.
According to the minutes from the September meeting of the rate-setting Federal Open Market Committee, which were released on Wednesday, central bankers indicated that they expect rates to be high until prices come down sharply.
“They had raised their assessment of the path of the federal funds rate that would likely be needed to achieve the committee’s goals,” according to the document, with inflation “showing little sign so far of abating.”
Bitcoin, which has fallen dramatically this year, could stay under pressure as traders fret over the prospect of further steep interest-rate hikes by the Federal Reserve on Nov. 1-2, when the FOMC meets next.
UPDATE (Oct. 13, 2022 13:53 UTC): Adds more information about the biggest drivers behind high inflation in September.
Related Quotes
Saving for an emergency fund requires effort, but it can save you from having to make more major sacrifices later.
Quant Insight Head of Analytics Huw Roberts joins Yahoo Finance Live to discuss the crypto market, bitcoin falling below $19,000, the September CPI print's impact on crypto stocks.
One rough rule of thumb for savings is to aim to save about 20% of your income each month, but this number depends on other factors like your stage of life and level of debt.
A drop-off in demand for PCs would be a bad sign as tech companies head into the crucial holiday season. Here's the optimistic macro view.
There’s more pain ahead in many markets as interest rates rise and demand falls, says Robert Dietz, chief economist at the National Association of Home Builders.
Putting $10,000 to work in Apple on its IPO day nearly 42 years ago would have made you a boatload of money.
Nearly half of 55 fintech and crypto experts believe Ethereum has been underpriced since the network became a proof-of-stake blockchain through “The Merge” upgrade last month, according to a recent report from financial service firm Finder. See related article: Why YOU should back Ethereum’s Fork Fast facts While 46% of the surveyed panelists said Ether […]
Bitcoin ETFs certainly failed at being a store of value — and turned out to be big losers this year so far instead. But at least they are not the absolutely worst asset you could buy.
Bitcoin mining firm BitNile (NILE) plans to set up a bitcoin-based marketplace in the first half of next year to reduce the complexity of transacting in bitcoin.
Cardano leads the pack of falling blue chip cryptocurrencies as investors turn cautious ahead of Thursday's release of the latest inflation data from the US.
While it may not be enough for some shareholders, we think it is good to see the Fulcrum Utility Services Limited…
President Biden on Thursday acknowledged that Americans “are squeezed by the cost of living” but touted “progress in the fight against higher prices” after Labor Department data showed inflation accelerated for the second straight month in September. “Today’s report shows some progress in the fight against higher prices, even as we have more work to…
Crypto brokerage services provider NYDIG laid off over 100 people in the past few weeks, or about a third of its staff.
U.S. Bank Asset Management Group CIO Eric Freedman and Quant Insight Head of Analytics Huw Roberts join Yahoo Finance Live to discuss the Fed and interest rate hikes, inflation, market fundamentals, and more.
The stock market rout isn't over yet, even with the S&P 500 index down about 25% from its peak on Tuesday, according to .
The annual U.S. inflation rate was little changed last month, hitting 8.2% year over year compared with August's 8.3% reading as the pace of price increases
The stock market took it literally on Thursday with a massive rally following an inflation reading that everyone agreed was way too hot. The CPI rose 0.4% in September, up from 0.1% in August, and above estimates for 0.2%. Core consumer prices, which don’t include food and energy, rose 0.6%, above forecasts for 0.4%, and unchanged from August.
Stock-market investors can be forgiven for feeling a little dizzy after a day that saw stocks plunge in reaction to another round of hotter-than-expected inflation data only to surge higher and extend gains into the closing bell. “While I certainly wouldn’t classify this morning’s flush capitulatory, the stock market is dealing with disappointing inflation reports a lot better than a short time ago,” said Mark Arbeter, president of Arbeter Investments LLC, in note. The Dow Jones Industrial Average (DJIA) fell just shy of 550 points, or 1.88%, but ended the day up 827.87 points, or 2.8%, at 30,038.72.
Everyone is hoping the market might be bottoming and by the recent actions of Bank of America clients, some evidently think the lows must be in sight. Last week, BofA customers splashed out $6.1 billion on US stocks, in what amounted to the third largest inflow since 2008. While the bank has stated it is not as confident the bottom is quite so close, it’s not hard to see why investors feel the time is right to lean into equities. The widespread losses have left scores of beaten-down stocks looki
A Wall Street analyst believes General Electric (NYSE: GE) shares are set up well going into earnings season and has raised her price target as a result. General Electric has been mired in a long slump, with shares down more than 60% over the past five years and down 28% in 2022 alone. Deutsche Bank analyst Nicole DeBlase is feeling upbeat about GE heading into earnings season.


Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.