BTC, ETH rally on easing U.S. inflation in September report

U.S. consumer prices for September were released today, showing a lower-than-expected increase, which signals moderate inflationary pressure and sparked a rally in Bitcoin and ETH. The CPI rose to 3% in September year over year, slightly below the forecast expectations of 3.1%, creating expectations that the Federal Reserve will lower interest rates next week. 

The Bureau of Labor Statistics released the September CPI results today, showing a 0.3% easing from the previous month’s 0.4% in August. The report had been delayed due to the ongoing federal government shutdown, which began at the start of this month.

The BLS recalled the suspended employees due to a shortage of work to compile the data before the statutory deadline for the Social Security Administration’s cost-of-living adjustment calculations. 

Bitcoin pumps roughly 2% today in hopes of softer market conditions

According to the report by the BLS, the core CPI excluding food and energy rose 0.2% monthly and 3.0% year-over-year, falling short of the previous estimate of 0.3% and 3.1%, respectively. The eased CPI rates marked the second consecutive month of slowed core inflation, supporting the expectations that the Fed may shift its monetary stance next week. 

U.S stock futures responded positively following the report, while the 2-year and 10-year Treasury notes declined. The S&P 500 jumped today by 0.98%, the Dow Jones Industrial Average rallied by 1.2%, the Nasdaq 100 jumped by 1.17%, and the Russel 2000 index jumped by 1.63% at the time of publication. Both the 2-year and 10-year Treasury notes declined by 0.01% today following the release of the CPI index.

Across the cryptocurrency ecosystem, Bitcoin and Ethereum regained bullish momentum following the announcement, driven by optimism that the expected rate cut will ease financial conditions and support riskier assets.

Bitcoin gained roughly 2% after the announcement to trade near $111,842 but declined later, resulting in a 0.22% growth over 24 hours at the time of publication, with a current price of $110,224.04. The performance represents a recovery from a two-week low near $109,000.

Bitcoin, ETH, SOL move as traders bet on 25bps Fed rate cut 

The Ethereum token briefly touched a price of $4,002, representing a 2.5% jump today after the CPI release, before correcting to a growth of around 0.27% at the time of publication, trading at $3,884.93 based on CoinMarketCap data.

Solana token SOL added roughly 2.1% today at the time of the CPI release, trading at around $195.31. The token has since declined to a negative 0.6% at the time of publication, trading at $ 188.90. The rally came as investors renewed hopes that a rate cut would ease financial conditions and support risky assets.

The Federal Reserve is set to release its interest rate decision for October, starting next Tuesday. For the inflation data, the policymakers will closely examine it as they prepare for their penultimate rate-setting meeting of 2025. As of now, markets widely expect another 25-basis-point cut next week. The CME FedWatch Tool indicates that traders currently see a 96.7% probability of a rate cut by next week. The federal funds rate currently stands in a range of 4.0% to 4.25%

With limited official data available this month, the CPI report may serve as one of the few indicators guiding next week’s policy decision.

So far, Bitcoin remains down about 12% from its October high of $126,198, when tariff tensions between the U.S. and China briefly sent investors into safe-haven assets, such as gold.

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