The U.S. Department of Labor announced the consumer price index (CPI) data for September on the evening of the 13th: the annual growth rate reached 8.2%, slightly higher than the market expectation of 8.1%; the core CPI (excluding food and energy costs) recorded 6.6% , hitting a new high in the past 40 years, the expected value and the previous value were 6.50% and 6.30% respectively.
U.S. inflation data for September was not optimistic and likely will remain high for some time to come, due to rising costs of services and goods. Coupled with the employment data released on the 7th of this month, the good performance of the labor market and the continued growth of employee wages may allow the Fed to maintain a tough tightening policy, raising interest rates by 75 basis points for the fourth consecutive time.
Bitcoin rebounds strongly after once approaching $18,000
Bitcoin (BTC) briefly topped $19,000 a minute before last night’s CPI data was released, but then plunged more than 4% to as low as $18,196 within five minutes.
However, after the short-term selling pressure emerged, the Bitcoin market began to reverse, and started a strong rebound at around 11:00 last night, reaching a maximum of $19,509.99 at around 3:00 in the morning of this (14th) day. Now at $19,401.
As for Ethereum (ETH), the price of the currency also briefly fell below $1200 after the data was released, and has been pulled back to $1288 by the time of writing.
The four major U.S. stock indexes also reversed after diving
The U.S. stock market also experienced a major reversal. Originally, the Dow Jones index fell nearly 550 points at the opening, but ended up soaring 827 points, with the highest and lowest spreads exceeding 1,500 points, setting a rare record in history. The S&P 500 also closed up 2.6%, ending a six-day black streak.
1) The Dow surged 827.87 points (2.83%) to end at 30,038.72.
2) The Nasdaq rose 232.05 points (2.23%) to end at 10,649.15.
3) The S&P 500 rose 92.88 points (2.6%) to end at 3,669.91.
4) The Philadelphia Semiconductor Index jumped 64.6 points (2.94%) to end at 2,263.2.
Biden: Fighting global inflation is my top priority
After the CPI data was released, the White House also issued a presidential statement later, saying that the United States has an advantage over any economy in dealing with the challenge of inflation, but needs to take more measures to quickly control inflation.
“While there has been some progress in containing price increases, inflation has averaged 2 per cent over the past three months, down from 11 per cent in the previous quarter. But even with this improvement, current price levels have Still too high, and combating global inflation affecting the U.S. and countries around the world is my top priority.”
The market estimates that the probability of a 75 basis point rate hike in November exceeds 97%
The CPI performance was slightly higher than expected, strengthening the market’s expectation that the Fed will continue to raise interest rates by 75 basis points. The odds of a 75 basis point rate hike are now about 97.8 percent, according to the CME’s Fed Watch Tool; the odds of a more aggressive 100 basis point hike rose to 2.2 percent.
Financial institutions are also not optimistic about the current inflation situation. They believe that the key to the current problem is not the overall price growth rate, but that inflation has penetrated into the service industry and the housing market. Jim Caron, Morgan Stanley Investment Management, told Bloomberg Television: “It’s brutal…I do think price growth is going to start to slow, and in some areas it’s already happening. But the problem now is that inflation has moved away from goods and into services.”
Bloomberg senior editor Chris Antsey responded: “For Democrats, this is a disaster. Today is the last CPI report before the Nov. 8 midterm elections. At this point we are experiencing the worst inflation in four years.”
Post time: Oct-31-2022