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Gasoline prices jumped 9.1% and drove more than half of September’s 3.7% US inflation reading, the print that sent Bitcoin toward $81,300 and put a Fed rate hike back in play this month.
The Bureau of Labor Statistics reported Wednesday that the Consumer Price Index rose 3.7% annually in September, above the 3.6% forecast and up from August’s 3.4%. Gasoline accounted for more than half the headline increase, and the broader energy index climbed 5.2%. Prices have now run above the Fed’s 2% target for 67 straight months.
The pump, not the economy
The catalyst traces back to oil. Crude has reportedly traded above $90 a barrel for most of the past two months amid the war between the US and Iran, and pump prices followed it up through September. That makes this an energy-driven inflation spike rather than a broad demand one, which matters for how the central bank reads the print: the Fed raised rates 25 basis points in September to a 3.75% to 4% target range, its first hike in more than three years, and now pricing on a second consecutive move has rebounded sharply.
Prediction markets roughly doubled the odds of a 25-basis-point October hike after the report, though the level depends on the venue: Kalshi showed the probability rising to 55% from 21%, while CME’s FedWatch tool put it at 44% to 49% from 22%.
Bitcoin fell as yields jumped, with the 10-year Treasury yield climbing to roughly 5.3% near 24-year highs and the 2-year up about 10 basis points to about 4.9%. The asset traded near $82,142, down 1.5%, in early Wednesday trading, then touched the $81,300 level analysts at Bitget flag as immediate support, where a sustained break below would invite further losses.
The Fed meets Oct. 27 and 28, and its decision lands before the September PCE release on Oct. 29, leaving officials to weigh the hot CPI without their preferred inflation gauge in hand. The next reading arrives Thursday with the Producer Price Index.
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