Fresh US inflation data released this week has put financial markets on edge, with back-to-back reports showing consumer and producer prices running hotter than expected. On October 14, the Consumer Price Index report showed annual US inflation accelerating to 3.7% in September. Gasoline prices jumped 9.1%, helping push Treasury yields higher and lifting the odds of an October Federal Reserve rate hike from 22% to around 45%.
A day later, the Producer Price Index added further pressure: US producer inflation surged to 6.3% annually, while core PPI accelerated to 5.0%, exceeding forecasts. The stronger-than-expected readings have raised concerns that the Federal Reserve may be forced to keep monetary policy tighter for longer, weighing on risk assets including cryptocurrencies.
