Bitcoin Slips Ahead of US Inflation Report as Traders Price In Fed Rate Increase
Key Takeaways
- •Bitcoin slipped 1.4% to around $74,200 on Tuesday, while the CoinDesk 20 Index fell 1.2% since midnight UTC.
- •Fed Governor Christopher Waller said he favored a higher rate even if inflation cooled last month and indicated a hotter-than-expected reading could justify a 50 basis point increase.
- •Traders are pricing in 25 basis points of tightening at the Fed's December 9 meeting, which would raise the federal funds target range to 4.00%-4.25%.
- •October headline inflation is forecast at 0.3% month over month and core prices at 0.2%, with no annual comparisons because last October's government shutdown prevented price collection.
- •Anthropic withdrew pricing details circulated to bankers that indicated an offering of roughly 867 million shares at $70 to $80 each, potentially raising $69.3 billion, calling the information inaccurate.
Bitcoin slipped on Tuesday as traders increased their bets on a Federal Reserve interest-rate increase ahead of the release of key U.S. inflation data.
Bitcoin (BTC), trading at $74,243.59, declined 1.4% since midnight UTC to around $74,200. The CoinDesk 20 Index (CD20), which tracks the largest cryptocurrencies, lost 1.2% since midnight and was little changed over 24 hours, according to CoinDesk.
Fed Governor Christopher Waller fueled expectations of higher rates, saying he favored a higher rate even if inflation cooled last month. A hotter-than-expected reading could warrant a 50 basis point increase, he said. According to the CME FedWatch tool, traders are pricing in 25 basis points of tightening at the Fed's Dec. 9 meeting, which would take the federal funds target range to 4.00%-4.25%. That policy path is a standing macro reference point for crypto markets, because benchmark rates anchor the yield on cash-like holdings relative to non-yielding bitcoin, while inflation readings are the main data steering the Fed's outlook between meetings.
The U.S. Bureau of Labor Statistics is forecast to report that headline inflation rose 0.3% month over month in October, while core prices, which exclude food and energy, increased 0.2%. Annual comparisons will not be available because last October's government shutdown prevented price collection, leaving no comparable data and making the month-over-month figures the report's main reference point. In September, the annual readings were 3.7% for headline inflation and 2.6% for core.
Other markets offered some relief. Oil fell 2% over the past 24 hours, with WTI trading around $84, its lowest level since late August, while Brent crude hovered near $90 after President Donald Trump signaled a pause in further Iran strikes. Gold fell just over 1%, trading below $4,100 an ounce. Nasdaq 100 index futures declined following Monday's rally, while the Dollar Index remained firm below 102.
In a separate development, Anthropic, the developer of the Claude AI assistant, withdrew pricing details circulated to bankers that indicated an offering of roughly 867 million shares at $70 to $80 each, potentially raising $69.3 billion, Reuters reported. The company said the pricing information was inaccurate and promised an updated filing, without specifying which details were wrong.
