CPI August 0.4% inflation pushed monthly consumer prices higher, nudging 12‑month inflation to 2.9% and tempering expectations for an aggressive Fed rate cut—markets now price a smaller 25bp easing as Bitcoin trades near $114,000 amid renewed ETF flows.
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CPI rose 0.4% in August vs 0.2% in July — U.S. inflation cooled but remains above the Fed’s 2% goal.
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Markets trimmed odds of a 50bp Fed cut; CME FedWatch Tool data shows investor probability shifted down.
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Bitcoin near $114,000 as BTC ETF flows hit an 8‑week high; short-term volatility expected to be muted per QCP Capital.
Meta description: CPI August 0.4% inflation lifts 12‑month rate to 2.9%, moderating Fed rate cut expectations; Bitcoin steadies near $114,000 — read key market impacts now.
What does the CPI August 0.4% inflation print mean for markets?
The CPI August 0.4% inflation print shows monthly consumer prices rose faster than July’s 0.2%, pushing 12‑month inflation to 2.9%. This outcome narrows room for a large Federal Reserve rate cut next week and shifts investor positioning toward a smaller 25 basis point easing.
How did Bitcoin react to the CPI release?
Bitcoin was largely flat following the August CPI release, trading near $114,000 as BTC ETF flows reached an 8‑week high. Price moved +0.3% over 24 hours and was unchanged over the past hour after the data, showing markets priced in limited immediate crypto volatility.
| Metric | August | July / Target |
|---|---|---|
| Monthly CPI | +0.4% | +0.2% (July) |
| 12‑month CPI | 2.9% | 2.0% (Fed target) |
| Bitcoin price | ~$114,000 | Unchanged (hourly) |
Why did Fed cut odds shift after CPI and PPI?
Investor odds for a 50 basis point September cut fell after CPI printed higher than expected, even though the prior PPI print was softer. CME FedWatch Tool implied probability for a 50bp cut dropped from 12% to 9% after the CPI release, while prediction market Myriad users (Dastan) still favor a 25bp cut at ~84%.
What are analysts saying about short-term volatility?
QCP Capital analysts expect CPI‑driven volatility to be short‑lived, noting PPI often leads CPI by 3–6 months. They observed muted market reactions to PPI and expect the September FOMC discussion to be the decisive event for asset classes.
Frequently Asked Questions
How will the 0.4% CPI print affect Fed policy next week?
Higher monthly CPI reduces the chance of a large 50bp cut, increasing the likelihood of a smaller 25bp easing at the FOMC meeting. Markets now price diminished rate cut scope for 2025–2026.
Will Bitcoin fall after the CPI print?
Not necessarily. Bitcoin was flat near $114,000 after the release as ETF flows supported prices. Analysts expect any CPI-driven volatility to be short‑lived unless the Fed signals a materially different policy path.
Key Takeaways
- CPI accelerated in August: Monthly CPI rose 0.4%, above July’s 0.2%, lifting 12‑month inflation to 2.9%.
- Fed cut odds adjusted: Probability of a 50bp September cut fell; markets now favor a 25bp easing.
- Crypto reaction muted: Bitcoin held near $114,000 as ETF inflows and limited volatility kept markets calm.
Conclusion
The CPI August 0.4% inflation print reshapes short‑term expectations for the Federal Reserve, making a smaller 25bp cut more likely. Bitcoin’s steady price near $114,000 reflects ETF support and muted immediate volatility. Watch the September FOMC statement, dollar trends, and further macro data for the next directional clues.
