【The dollar hits a year-and-a-half high, and several Asian central banks are losing sleep 💵🫨】
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Just as hopes of cooling inflation were beginning to emerge, the market turned around and started betting on rate hikes. September CPI was up 3.7% year over year, higher than expected. Month over month, it rose 0.6%—the biggest jump in recent months. As soon as the data came out, bets on an October rate hike doubled, jumping from 20% to 40%. Personally, I find that reaction more interesting than the inflation figures themselves. 🧐
The dollar index has climbed to its highest level in nearly a year and a half. Several Asian countries have already begun restarting their currency-defense efforts. This isn’t just one country’s problem. When a local currency falls too quickly, import costs rise across the board. Central banks can only step in with their foreign exchange reserves. Whoever lets go first feels the pain first. 🌊
The timing makes things even trickier. The Fed raised rates by 25 basis points last month, its first hike since 2023. The next decision is scheduled for October 28, just six days before the November 3 midterm elections. Historically, rate moves ahead of elections have been uncommon. The market is hanging on every word Chairman Warsh says before the vote. ⚖️
The next trigger could come tonight. At 8:30 p.m., the U.S. September PPI will be released. Oxford Economics expects a month-over-month increase of 0.6%. The market had previously expected just 0.5%, while August’s increase was only 0.4%. Diesel prices are up more than 70% year over year. On September 22, retail prices briefly surged to $6.528 per gallon, a record high. 🛢️
The crypto market can’t escape this chain reaction either. When the dollar strengthens, $BTC is among the first to get drained. It’s not that the asset has gotten worse; it’s that the risk-free rate has become more attractive. In plain English, money now has a safer place to go. Risk assets have to wait their turn. We’ve seen this pattern play out repeatedly over the past year. 🪙
The market already took a beating last night. The Nasdaq fell nearly 2%, and the semiconductor index logged its sixth straight decline. $BTC dropped 3.3% in a day, edging toward the $80,000 mark. Ethereum fell below $2,500. My approach is simple: in moments like this, I neither chase nor sell in panic—I’ll wait and see what tonight’s PPI brings. 🫠
📌 The dollar is at a year-and-a-half high, and tonight’s PPI is the next hurdle for rate-hike bets.
Do you think they’ll make a move in October? Let’s talk in the comments.
Join Mr. X’s fan chat on the homepage 🔥
Just as hopes of cooling inflation were beginning to emerge, the market turned around and started betting on rate hikes. September CPI was up 3.7% year over year, higher than expected. Month over month, it rose 0.6%—the biggest jump in recent months. As soon as the data came out, bets on an October rate hike doubled, jumping from 20% to 40%. Personally, I find that reaction more interesting than the inflation figures themselves. 🧐
The dollar index has climbed to its highest level in nearly a year and a half. Several Asian countries have already begun restarting their currency-defense efforts. This isn’t just one country’s problem. When a local currency falls too quickly, import costs rise across the board. Central banks can only step in with their foreign exchange reserves. Whoever lets go first feels the pain first. 🌊
The timing makes things even trickier. The Fed raised rates by 25 basis points last month, its first hike since 2023. The next decision is scheduled for October 28, just six days before the November 3 midterm elections. Historically, rate moves ahead of elections have been uncommon. The market is hanging on every word Chairman Warsh says before the vote. ⚖️
The next trigger could come tonight. At 8:30 p.m., the U.S. September PPI will be released. Oxford Economics expects a month-over-month increase of 0.6%. The market had previously expected just 0.5%, while August’s increase was only 0.4%. Diesel prices are up more than 70% year over year. On September 22, retail prices briefly surged to $6.528 per gallon, a record high. 🛢️
The crypto market can’t escape this chain reaction either. When the dollar strengthens, $BTC is among the first to get drained. It’s not that the asset has gotten worse; it’s that the risk-free rate has become more attractive. In plain English, money now has a safer place to go. Risk assets have to wait their turn. We’ve seen this pattern play out repeatedly over the past year. 🪙
The market already took a beating last night. The Nasdaq fell nearly 2%, and the semiconductor index logged its sixth straight decline. $BTC dropped 3.3% in a day, edging toward the $80,000 mark. Ethereum fell below $2,500. My approach is simple: in moments like this, I neither chase nor sell in panic—I’ll wait and see what tonight’s PPI brings. 🫠
📌 The dollar is at a year-and-a-half high, and tonight’s PPI is the next hurdle for rate-hike bets.
Do you think they’ll make a move in October? Let’s talk in the comments.