Bitcoin Holds Gains as Fed Rate‑Hike Odds Rise to 85% After August CPI

Bitcoin closed the U.S. trading week at roughly $78,683, up 2.08% over the prior 24 hours, even as the August consumer‑price index (CPI) delivered a mixed signal to the Federal Reserve.

Inflation data split the market view

The CPI rose 0.4% in August, driven largely by a 3.9% jump in gasoline prices, which accounted for more than one‑third of the overall increase. Core CPI, which excludes food and energy, rose 0.3% month‑over‑month, with its annual rate easing to 2.4% from 2.5%.

Key components

• Gasoline index: +3.9%
• Energy index: +2.1%
• Core CPI (monthly): +0.3%
• Shelter: +0.3% month‑over‑month
• Services excluding energy: +3.0% year‑over‑year

Fed rate‑hike expectations climb

Following the CPI release, CME FedWatch probabilities indicated an 85% chance of a 0.25‑percentage‑point rate increase at the September 15‑16 Fed meeting, up from about 70% before the data.

Fed Governor Christopher Waller’s stance

Waller said progress toward the 2% inflation target would incline him to keep rates steady, but a “hot” report could prompt a hike. He emphasized core inflation as a clearer gauge of underlying price pressures, noting that recent energy spikes had not yet translated into broader inflation.

Bitcoin’s short‑term outlook

Weekend trading saw Bitcoin dip to around $77,500 amid thin liquidity, but the earlier gain remained notable given the heightened rate‑hike odds.

Risks ahead

• Potential persistence of energy price pressure in September
• Impact of future inflation data on Fed expectations
• Volatility from thin weekend markets