30s Summary

The October US inflation data matched economists’ predictions, coinciding with a surge in the Bitcoin price to near $90,000. The Consumer Price Index (CPI) rose by 0.2%, while the Core CPI (excluding food and energy costs) increased by 0.3%. Concurrently, Bitcoin’s price rose by nearly 30% over the past week. This has been driven by the US Federal Reserve’s decision to cut the federal funds rate by 75 basis points, looser monetary policies adopted by Western banks and the re-election of the crypto-friendly Donald Trump as president.

Full Article

The inflation data for October in the U.S. was exactly what economists thought it would be. This had an interesting effect on Bitcoin, pushing it close to the $90,000 mark.

To drill down a bit into the numbers — the Consumer Price Index (CPI) had a bit of a bump, going up 0.2% in October. This matched the predictions and the increase from the previous month of September. When you step back and look at the bigger picture over the year, the CPI was up 2.6%, again matching forecasts.

If you take a look at Core CPI, which is a bit like the CPI but leaves out food and energy costs because they can swing a lot, it also went up in October. It climbed 0.3%, which is what people thought it would and mirrors the rise in August. Over the year, the Core CPI was 3.3%, which again was as expected and the same as the previous month.

Compared with these numbers, it seems like Bitcoin had a bit of a field day with its price climbing to $89,500. This means it’s up nearly 30% over the past week.

The U.S. Federal Reserve has been doing its part too by cutting federal funds rate (which is kind of like the interest rate banks charge each other) by 75 basis points since it started easing cycle in September. This along with the fact that most Western banks have been kind of being loose with their money and the fact that Donald Trump, who is pretty friendly towards crypto, got re-elected last week has made Bitcoin soar to new highs.

What might happen next? Well, the CME FedWatch — which gives odds on what the Fed might do at its next policy meeting based on what’s happening with short-term interest rates — think the chances for an additional 25 basis point rate cut in mid-December skyrocketed from just under 60% to 69% after this morning’s data.