What happened?
The US Consumer Price Index came in cooler than expected at 3.0% year‑over‑year in September (vs. 3.1% expected) with a monthly rise of 0.3% instead of the forecasted 0.4%. Core CPI also eased to 3.0% year‑over‑year with a 0.2% monthly gain, while higher gas, food and tariffs were the main drivers. Markets reacted fast: Fed rate‑cut odds surged (about 97% for October on Polymarket), risk assets rallied and Bitcoin jumped back above $111,000.
Who does this affect?
The Fed and policymakers, because softer inflation increases pressure and market expectations for near‑term rate cuts of 25–50 basis points. Investors and traders in stocks and crypto are affected immediately — we saw big long positions opened, futures tick up, and renewed interest from institutions tracking money‑supply signals. Everyday consumers still feel higher gas and food costs, and leveraged crypto holders remain exposed to swings after recent liquidations.
Why does this matter?
Softer inflation makes Fed easing more likely, which is generally bullish for risk assets and helped push Bitcoin higher in the short term as markets price in more liquidity and lower rates. If cuts happen, more money could flow into equities and crypto, potentially supporting a push toward $130k–$132k for Bitcoin in early 2026, though technical warning signs mean big drawdowns are still possible. Expect higher volatility as markets balance macro tailwinds with crypto‑specific leverage and positioning, with likely consolidation around $95k–$120k unless a clear breakout on strong volume emerges.