Key Points
- The Federal Reserve’s key inflation rate reached 2.1% in September, nearing the target of 2%.
- Bitcoin’s value dropped to $69,263.81 due to profit-taking after a recent rally.
The inflation rate in September was 2.1%, according to recent data from the Federal Reserve. This rate is nearing the central bank’s target.
Fed Inflation Rate Analyzed
A report from the Commerce Department on October 31st showed a slight increase in inflation. The personal consumption expenditures (PCE) price index rose by 0.2% on a seasonally adjusted basis for the month. This 12-month inflation rate of 2.1% aligns with the Dow Jones projections, suggesting a steady movement toward the Fed’s inflation goals amid ongoing economic assessments.
The PCE data is the Federal Reserve’s main indicator of inflation. Policymakers also closely monitor additional metrics to guide their decisions. The goal of the Feds is to maintain an annual inflation rate of 2%, a target that hasn’t been achieved since February 2021. Core inflation, which currently stands at 2.7%, remains a concern for the Feds.
Impact on the Crypto Market
The release of key inflation data led to profit-taking in the cryptocurrency market. Bitcoin’s value rallied to $73,000—its highest since March. However, the momentum didn’t last, and the value dropped to $69,263.81. This represented a 4.58% decline over 24 hours. The global crypto market capitalization also fell to $2.33 trillion on November 1st, a 1.75% decrease over 24 hours.
In 2022, Bitcoin’s value fell below $20,000 as the entire market faced a downturn. This was due to concerns over the Federal Reserve’s approach to interest rate increases. However, in 2023, Bitcoin saw a 1% boost following FOMC meetings, with gains reaching 3% after a week.
As the Federal Reserve prepares for its upcoming meeting, there is speculation about further rate reductions. Policymakers anticipate quarter-point decreases in November and December, following a half-percentage-point cut in September. The Fed aims for a policy rate of 3.4% by the end of 2025 and seeks stability at 2.9% through 2026 and 2027. This approach is aimed at achieving a neutral interest rate amid economic headwinds.
