U.S. September CPI Rises Softer Than Expected; Bitcoin and Stocks Extend Gains

The U.S. Consumer Price Index (CPI) for September came in below expectations, reinforcing market bets that the Federal Reserve is likely to cut interest rates at its final two meetings of the year.

Despite the U.S. government shutdown limiting the release of economic data this month, the Bureau of Labor Statistics managed to publish its September CPI report. The headline CPI rose 0.3% month-over-month, below economists’ forecast of 0.4% and down from August’s 0.4% increase. On a year-over-year basis, CPI advanced 3.0%, slightly below the expected 3.1% and up from August’s 2.9%.

Core CPI, which excludes volatile food and energy prices, increased 0.2% month-over-month, versus expectations of 0.3% and August’s 0.3%. Year-over-year, core CPI stood at 3.0%, below the anticipated 3.1%.

Bitcoin (BTC $111,580.60) extended earlier gains immediately following the report, trading around $111,600.

In traditional markets, U.S. stock futures also rose, with the Nasdaq 100 gaining nearly 1%. The 10-year Treasury yield dipped two basis points to 3.97%, while the U.S. dollar weakened slightly.

Ahead of the data release, markets had largely priced in a 100% probability of a 25-basis-point rate cut at the Federal Reserve’s next policy meeting, according to CME FedWatch. Traders also assigned roughly a 90% chance of an additional 25-basis-point cut at the Fed’s final meeting of the year in December.