Crypto Market Awaits US CPI Next Week, Here’s What to Expect

The crypto market is once again gearing up to enter a crucial week, with a flurry of macroeconomic developments in focus. For context, the US CPI and PPI inflation data are scheduled for next week, which would provide insights into the potential next move of the US Federal Reserve.

However, the market is anticipating the US Fed to keep interest rates unchanged at its October meeting. Despite that, the latest US FOMC minutes showed that the central bank officials might consider another rate hike this year, which has fueled discussions among market participants.

Crypto Market Awaits US CPI Data, Here’s All

Next week would be crucial for the broader financial sector, let alone the crypto market. The US CPI and PPI inflation data, which the US Fed often considers to gauge inflationary pressures, are scheduled to be released next week.

The US CPI, scheduled for Wednesday, October 14, is expected to come in at 0.6% on a monthly basis for September, as compared to 0.4% in the prior month. On a year-over-year (YoY) basis, the inflation data is expected to come in at 3.7%, up from 3.4% in the prior month’s reading.

The Core CPI, which excludes food and energy prices, is expected to come in at 0.2% on a monthly basis and 2.5% on a YoY basis. The Core CPI readings for August were recorded at 0.3% and 2.4%, respectively.

In addition, the crypto market would also keep close track of the US PPI inflation data, scheduled for Thursday, October 15. The US PPI is expected to come in at 0.6% on a month-over-month (MoM) basis, as compared to 0.4% recorded in August.

Can There Be Another Fed Rate Hike in October?

Both the US CPI and PPI data would be closely tracked by the crypto market participants, as it would set the stage for the Fed’s potential next move with its policy rate plans. If the inflationary readings come in hotter-than-expected, it could dampen market sentiment.

For context, a hotter reading would provide more space for the US Fed to consider another rate hike by 2026 end. Already, at the last US FOMC minutes, the Fed officials have signaled that they might raise the interest rate by another 25 bps by year-end, which has weighed on sentiment.

The crypto market often faces higher volatility in times of higher policy rates. However, according to the CME FedWatch Tool, the odds of a potential Fed rate hike in October are now only at 17.7%.

Despite that, crypto market investors should exercise due diligence amid the already topsy-turvy scenario in the market. Besides, the upcoming US CPI and PPI data might also trigger volatile trading in the digital assets space as well as in the broader financial markets.