CPI Data
TL;DR
- The US government shutdown, now lasting 24 days, has suspended payments for two million workers.
- The delay in US CPI data is creating market uncertainty about the Fed’s next decision.
- Analysts warn that inflation above 3.2% year-over-year could strengthen the dollar and negatively affect Bitcoin.
The cryptocurrency market, especially Bitcoin, is on high alert this Friday. The reason: the long-awaited release of the US CPI data for September, which will finally be revealed today after a significant delay of more than a week.
This delay is not accidental. It is a direct consequence of the United States government shutdown, which continues in full force and reaches its 24th day today. This situation, already ranking as the second-longest in the country’s history and approaching the 35-day record set in 2019, has left some 900,000 workers furloughed and has halted payments for approximately two million federal employees.
The administrative deadlock has affected the release of crucial economic reports, with the US CPI data being the most sensitive for financial markets. This index is a key piece of information that the Federal Reserve (Fed) uses to determine its next moves on interest rates.
Historically, the CPI release has triggered sharp movements in Bitcoin’s price. The question dominating market sentiment is whether the “painful” bearish slide seen in previous announcements will be repeated.
Higher Inflation Than Expected?
General expectations in Washington suggest that consumer prices will have increased for the second consecutive month in September. Experts believe this is related to tariff-sensitive goods.
“The government shutdown may have altered the September CPI release date, but it hasn’t changed the stubborn state of inflation,” commented Sarah House, a senior economist at Wells Fargo. House expects goods inflation to stay elevated, while an easing in housing costs should help cool services inflation.
Analysts from Bitfinex indicated they will be closely watching the core CPI. They warn that “a monthly result above 0.35% or a core print above 3.2% year-over-year will lift real yields, strengthen the dollar, and cool risk appetite.”
Conversely, a softer report, below 2.8% year-over-year, could “revive rate cut expectations and spark a risk-on move,” which would benefit assets like Bitcoin.
Despite the risk of an inflationary rebound, the market consensus still expects the US Federal Reserve to cut the key interest rate later this month and possibly again in December.
