Bitcoin Price Jumps Above $85,000 on Lighter-Than-Expected Inflation Data
Key Takeaways
- •Bitcoin briefly climbed back above $85,000 on Wednesday, recently trading near $84,246, after U.S. inflation data came in softer than expected.
- •The personal expenditures index, the Federal Reserve's main inflation gauge, rose 3.4% on a headline basis and 3% for core in August, both below estimates but still above the Fed's 2% target.
- •The cooler-than-expected inflation print makes it less likely the Federal Reserve will raise interest rates at its October meeting.
- •Despite the Fed's September rate hike under Chair Kevin Warsh, Bitcoin shrugged off the move and surged as high as $87,158 earlier this month.
- •Bitcoin has also rallied since the U.S. Treasury announced plans to more than double its government debt repurchases, including buybacks of up to $6 billion in longer-term debt.
Bitcoin's price rose on Wednesday after fresh U.S. data showed that inflation had risen more slowly than expected, a print that lifted the leading cryptocurrency back above the $85,000 level.
The personal consumption expenditures price index — the Federal Reserve's main inflation gauge, which tracks the prices consumers pay for goods and services — increased in August by 3.4% on a headline basis and 3% for core, both well below estimates. Both readings remain above the Fed's long-stated 2% inflation target, underscoring why officials have kept their focus on bringing price growth down.
Bitcoin's price recently stood at $84,246 after jumping as high as $85,518 at one point on Wednesday morning in New York.
The lighter-than-expected reading means the Federal Reserve is less likely to hike interest rates in October, the next scheduled opportunity for the central bank to adjust policy. High inflation has been causing the U.S. central bank to take a more hawkish approach to managing monetary policy.
In his first speech since becoming Fed chair, Kevin Warsh said in August that the central bank had "more work to do" to fight inflation. The Fed then raised interest rates in September. "The plain fact is that inflation is too high, and has been for too long," Warsh said at the time.
Bitcoin's price, however, appeared to shrug off the move and put together a strong run in the week that followed the central bank's decision. The coin surged as high as $87,158 earlier this month. Some analysts have said investors are shrugging off the hike because they do not expect the Fed to change policy and start raising rates successively.
Bitcoin has also rallied since the U.S. Treasury announced plans to more than double the size of its government debt repurchases — operations in which the department buys back outstanding longer-term debt from the market.
JUST IN: US Treasury Department to buy back up to $6 billion in longer-term debt AGAIN tomorrow Buy Bitcoin pic.twitter.com/0fc6V7u4oH
— Bitcoin Magazine (@BitcoinMagazine) September 30, 2026
Bitcoin's price has in the past performed well in a low interest rate environment, along with other "risk-on" assets.
U.S. President Donald Trump has repeatedly put pressure on the Federal Reserve to lower interest rates. Last year, Trump threatened to fire ex-Fed Chair Jerome Powell and said he did a "bad job" for not lowering interest rates.
This article first appeared on Bitcoin Magazine and was written by Mathew Di Salvo.
