Crypto News | Traders Bet on Three More Fed Hikes, Overtaking the Fed’s Own A fall in those futures is traders paying up for higher rates, not a sell-off in any conventional sense. It is the cleanest available read on where the market thinks policy is heading, because it is a position rather than a forecast.
The Dollar Did What Higher Rates Make It Do
The Dollar Index gained roughly 0.40 points to 102.52, continuing a grind higher from around 101.81 earlier in the week.
Higher expected US rates widen the yield advantage of holding dollars, which draws capital toward dollar assets and bids the currency up. The same mechanism pushed gold down about $40 to $4,129.60 and silver down $1 to $58.07 — both pay no yield, so a higher-for-longer rate path raises the cost of owning them.
The Trigger Was a Gasoline-Driven Print
September headline CPI came in at 3.7% against 3.6% expected, up from 3.4% in August. Core CPI rose to 2.6% from 2.4%, above the 2.5% forecast, with the monthly core rate holding at 0.3% rather than cooling to the 0.2% expected.
The composition complicates the hawkish read. Average US gasoline rose 7.3% over the month, which accounts for most of the 1.1 point gap between headline and core. Energy-driven inflation is the kind monetary policy has least purchase on.
Markets priced the overshoot anyway, and the core
$XAU $XAG
The Dollar Did What Higher Rates Make It Do
The Dollar Index gained roughly 0.40 points to 102.52, continuing a grind higher from around 101.81 earlier in the week.
Higher expected US rates widen the yield advantage of holding dollars, which draws capital toward dollar assets and bids the currency up. The same mechanism pushed gold down about $40 to $4,129.60 and silver down $1 to $58.07 — both pay no yield, so a higher-for-longer rate path raises the cost of owning them.
The Trigger Was a Gasoline-Driven Print
September headline CPI came in at 3.7% against 3.6% expected, up from 3.4% in August. Core CPI rose to 2.6% from 2.4%, above the 2.5% forecast, with the monthly core rate holding at 0.3% rather than cooling to the 0.2% expected.
The composition complicates the hawkish read. Average US gasoline rose 7.3% over the month, which accounts for most of the 1.1 point gap between headline and core. Energy-driven inflation is the kind monetary policy has least purchase on.
Markets priced the overshoot anyway, and the core
$XAU $XAG