US PPI Inflation Data Further Sparks Concern Over Bitcoin Dip Ahead

The highly awaited US Producer Price Index (PPI) data showed that inflation has come in hotter than expected at 1.8% in September, as compared to market expectations of 1.6%. This rising inflation figure, especially after the recent US CPI data, has sparked concerns in the market, over its potential impact on BTC and other crypto. Besides, the latest set of gloomy economic data has fueled debates if the US Federal Reserve would once again move with a tightened monetary policy ahead.

US PPI Comes In Hotter-Than-Expected

The latest Labor Department data showed that the US PPI inflation came in at 1.8%, up from the 1.7% level noted in August. On a month-over-month (MoM) basis, the inflation remains unchanged at 0.0%, after rising 0.2% in the prior month.

Simultaneously, the Core PPI inflation soared significantly to 2.8% last month, up from the market expectations of 2.6% and the 2.4% level of August. On an MoM basis, the Core PPI figure, which excludes the food and energy prices, came in at 0.2%, as compared to 0.3% in the previous month.

These hotter-than-anticipated inflation figures have sparked discussions in the broader financial sector, let alone the crypto market. The recent US CPI data also exceeds the market forecast, signaling a hawkish stance by the US Fed at their upcoming gathering next month.

Bitcoin Dip Ahead?

The latest US PPI data has weighed on investors’ sentiment, indicating that the inflation in the nation is once again soaring. It has sparked concerns over a potential dip in Bitcoin price ahead, fueling debates over smaller or no Fed rate cut at the central bank’s upcoming gathering.

However, the BTC price traded near the flatline during the writing and exchanged hands at $62,000. Its trading volume rose 6% to $30.4 billion, and the flagship crypto has touched a high and low of $61,383 and $58,895 in the last 24 hours.

After the inflation data today, the US 10-year Bond Yield rose 0.34% to 4.109, while the US Dollar Index fell 0.03% to $102.737. Meanwhile, according to the CME FedWatch Tool, there is an 88% probability of a 25 bps Fed rate cut at the central bank’s upcoming meeting, with the other 12% betting over no rate cuts. Previously, the market was anticipating a larger interest rate of 0.5% by the US Fed.

The latest US Job data and the inflation figures have sparked concerns over a potential hawkish stance by the US Fed at their upcoming meeting. Now, the market will keep a close track of the Fed officials’ comments for potential cues on the central bank’s upcoming move with their policy rate plans.