This morning, Waller said he’d consider a 50-basis-point hike if core CPI came in at 0.3%. By evening, the data delivered exactly 0.3%.
U.S. October CPI is out tonight at 21:30: headline CPI rose 0.4% month over month, versus expectations of 0.3%, down from September’s 0.6% but still above expectations. Core CPI rose 0.3% month over month, versus expectations of 0.2%, unchanged from September. The government shutdown last October meant prices weren’t collected, so there’s no year-over-year figure this time—only month-over-month data.
$BTC plunged to around $73,534 as soon as the data came out. The uncertainty around a December rate hike is basically gone: after Waller’s remarks, the probability of a 25-basis-point hike priced in by CME had already surged to 96.3%. Now core CPI has landed right on the level he cited, so a 50-basis-point hike is no longer just talk.
This whale’s take: A 25-basis-point hike in December is practically a done deal; the only real question is how much. Core CPI has stuck at 0.3% for two consecutive months, and inflation is proving stickier than the market expected. It’s unrealistic to think one data point will erase rate-hike expectations. For crypto, the short-term outlook will likely continue to swing with the dollar and Treasury yields. The direction should become clearer once the December 9 decision settles the question of how much rates will rise.
U.S. October CPI is out tonight at 21:30: headline CPI rose 0.4% month over month, versus expectations of 0.3%, down from September’s 0.6% but still above expectations. Core CPI rose 0.3% month over month, versus expectations of 0.2%, unchanged from September. The government shutdown last October meant prices weren’t collected, so there’s no year-over-year figure this time—only month-over-month data.
$BTC plunged to around $73,534 as soon as the data came out. The uncertainty around a December rate hike is basically gone: after Waller’s remarks, the probability of a 25-basis-point hike priced in by CME had already surged to 96.3%. Now core CPI has landed right on the level he cited, so a 50-basis-point hike is no longer just talk.
This whale’s take: A 25-basis-point hike in December is practically a done deal; the only real question is how much. Core CPI has stuck at 0.3% for two consecutive months, and inflation is proving stickier than the market expected. It’s unrealistic to think one data point will erase rate-hike expectations. For crypto, the short-term outlook will likely continue to swing with the dollar and Treasury yields. The direction should become clearer once the December 9 decision settles the question of how much rates will rise.
