🚨 US CPI Came Hot - What Will Happen In December?

1. What Is CPI?

CPI means Consumer Price Index. It measures inflation - how expensive things are becoming for normal people in the US. When CPI is high, it means inflation is high.

2. What Came Today?

- CPI Month-on-Month: 0.6% (Market Expected: 0.3%)

- CPI Year-on-Year: 3.7%

- This is double than expected. It means inflation is not cooling, it is rising again. September CPI was also 0.6%.

3. What Will Happen In December?

- The US Federal Reserve decides interest rates in December.

- Before CPI, the chance of a 0.25% rate hike in December was 76%. After this hot CPI, it has jumped to 96%.

- Fed Governor Waller already said he will support a hike in December even if CPI was cool. Now with hot CPI, hike is almost confirmed.

- When Fed increases rates, borrowing becomes expensive, Dollar becomes strong, and risky assets like Crypto and Stocks go down.

4. What Does It Mean For Crypto?

- No relief rally: If CPI was cool, BTC could have bounced to $76,000. Now that chance is gone.

- BTC is stuck: BTC is trading around $74,100, below $75,000 resistance. Support is at $73,500 - $73,000.

- Pressure till December: Until December meeting, market will stay under pressure because traders will keep fearing the hike.

- ETF pressure continues: $201M already went out from BTC ETF yesterday. With hot CPI, more outflow can come.

5. What To Watch Next?

- 13 Nov: PPI Data

- 18 Nov: Fed Minutes

- 25 Nov: PCE Data - Fed's favourite inflation gauge

Conclusion:

Hot CPI = December Rate Hike Almost Confirmed.

Market can stay weak / sideways till December. Avoid high leverage.

This is not financial advice. DYOr