Crypto and stock markets are feeling the pain after the Sept. 13 inflation report printed an unexpectedly hot figure that showed headline inflation rising by 0.1% month-over-month.
Even with gas prices falling to multi-month lows and a cooling housing market, core inflation saw a 0.6% month-over-month bump and year-to-year inflation sits at 8.3%.
This chart from @TheTerminal shows why this #CPI number is so disappointing. The contribution of energy has declined, as expected; but services inflation is now rising sharply. Not what the #FOMC will have wanted to see. pic.twitter.com/BsfwFsuyD5
While market participants and investors had estimated the next Federal Reserve interest hike to be a hefty 0.75 basis points, many also subscribed to a loosely held assumption that Sept. 13’s CPI report would come in softer than projected.
Given that the market had supposedly “priced in” a 0.75 bps hike, crypto traders expected Bitcoin (BTC), Ether (ETH) and select altcoins to break out to the upside.
Well, obviously the complete opposite occurred.
Perma-bull Fed pivot CPI traders REKT. LOL
The Dow slid about 2.6%, while the S&P 500 and Nasdaq fell 2.9% and 3.6%, respectively. Naturally, risky assets also fell and Bitcoin price gave up more than 50% of its recent weekend gains with a 9% pullback to $20,350. With just 1 day left before the Merge, Ether price also pulled back 7.29% to $1,590, and the majority of cryptocurrencies in the top 100 are nursing single to double-digit losses at the moment.
While Bitcoin’s weekend rally from Sept. 9 extended into the start of this week and the price pushed as high as $22,800, the earlier analysis cautioned that BTC was also trading near a key overhead resistance.
As seen below, the multi-month
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