Bitcoin came under renewed selling pressure after US inflation climbed higher than expected in September, raising concerns about the Federal Reserve's next interest rate decision.
According to figures attributed to the Bureau of Labor Statistics, the Consumer Price Index (CPI) increased 3.7% annually, up from 3.4% in August and above economists' 3.6% forecast.
Headline inflation rose 0.6% month over month, matching expectations but accelerating from August's 0.4% increase.
Meanwhile, core CPI, which excludes volatile food and energy prices, increased 0.3% monthly and 2.6% annually.
Both core readings exceeded analysts' forecasts of 0.2% and 2.5%, respectively.
The stronger figures raised concerns that inflationary pressures could complicate the Federal Reserve's monetary policy decisions.
Energy Prices Drive September Inflation
Gasoline prices were a major contributor to September's inflation increase, rising 9.1% during the month.
The broader energy index climbed 5.2%, while shelter costs increased 0.4% and food prices remained unchanged.
According to the report, gasoline accounted for more than half of the monthly headline CPI increase.
However, price increases extended beyond energy, with higher costs recorded for used vehicles, airline tickets, recreation, education and healthcare services.
The stronger-than-expected core inflation readings attracted particular attention because they suggested that price pressures were not limited to energy markets.
These developments prompted investors to reconsider the outlook for interest rates and financial market liquidity.
Bitcoin Drops Below $82,000 as Markets React
Bitcoin initially approached $84,000 before the inflation release, trading near $83,450 during European morning hours.
Following the announcement, BTC declined by roughly $1,000 toward $82,800 before extending its losses.
At the time of the source report, Bitcoin traded around $81,650, down more than 2% over 24 hours. Ethereum also weakened, falling approximately 3.5% to $2,429.
Traditional financial markets reacted negatively. The 10-year US Treasury yield reportedly climbed to 5.308%, while the two-year yield reached 4.924%.
Meanwhile, Nasdaq 100 futures declined 0.65%, S&P 500 futures slipped 0.3%, and gold fell approximately 1.5% to $4,116 per ounce.
The broader reaction reflected investors' concerns about tighter monetary conditions following unexpectedly persistent inflation.
Federal Reserve Faces October Rate Decision
The inflation report arrives ahead of the Federal Reserve's October 27–28 monetary policy meeting, making it a critical input for policymakers.
The Federal Reserve raised interest rates in September, bringing its benchmark range to 3.75%–4.00%.
September's stronger inflation figures have renewed speculation about another increase, although an October rate hike remains uncertain.
Reuters reported that market expectations shifted following the release, with some analysts continuing to favor a pause in October and a possible increase in December.
For cryptocurrency markets, higher borrowing costs can weigh on speculative investment and reduce demand for riskier assets.
With US inflation reaching 3.7% and Bitcoin falling below $82,000, traders will closely monitor Federal Reserve commentary ahead of the upcoming decision.
