Bitcoin and US stocks rebound after August CPI as Fed hike odds rise

  • Bitcoin and US stocks rebounded after August inflation increased expectations for Federal Reserve tightening.
  • Core CPI rose 0.3% month over month, while market-implied odds of a quarter-point hike reached roughly 85%-90%.
  • Bitcoin recovered toward $80,000 and major indexes ended four sessions of losses, although all three declined for the week as oil and yields rose.

Bitcoin and US stocks rebounded after August consumer-price data showed firmer underlying inflation, increasing expectations for tighter Federal Reserve policy as higher oil prices and Treasury yields added pressure. Core CPI rose 0.3% month over month, above the 0.2% forecast, while headline CPI increased 0.4% monthly and 3.4% annually, matching forecasts. Market-implied odds of a quarter-point hike at the following week's Federal Open Market Committee meeting rose to roughly 85%-90%, including 87% on CME FedWatch and 81% among Kalshi traders. Bitcoin briefly fell to $76,000 before recovering toward $80,000. The S&P 500, Nasdaq and Dow gained 0.86%, 0.96% and 0.98% in the rebound session, but finished the week down 0.8%, 0.7% and 1.6%, respectively.

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