The price of Bitcoin has stabilized at 111 thousand dollars at the time of publishing this report, but more volatility is expected later today.
The government shutdown in the United States continues in full force, having entered its twenty-fourth day. It has become the second longest shutdown in U.S. history, closing in on the record of 35 days set during Trump's first term in 2019. According to current data, the pay of about two million workers has been suspended, while 900 thousand of them have been given temporary leave.
In addition, many government sectors have fallen behind their deadlines, such as the release of the previous month's Consumer Price Index data, which is critical in determining the next step for the Federal Reserve. After a significant delay of over a week, the Consumer Price Index numbers for September are set to be released later today, which is expected to affect the price of Bitcoin as it has countless times in the past. The question is: Will the price drop repeat after the previous announcement?
Higher than expected?
General expectations in Washington indicate a rise in consumer prices for the second consecutive month in September, which experts believe is linked to tariff-sensitive goods.
Perhaps the government shutdown may have changed the release date of the Consumer Price Index for September, but it has not changed the ongoing inflation situation. On the surface, we expect that goods price inflation will remain high due to continued tariffs, while easing core housing costs could help calm service inflation, as noted by Sarah House, a leading economist at Wells Fargo.
In a statement to CryptoPotato, Bitfinex analysts commented:
"We will first monitor the core Consumer Price Index and the division of services excluding housing, as exceeding the monthly reading of 0.35% or exceeding the core reading of 3.2% year-over-year would raise real yields and bolster the dollar while curbing risk appetite, whereas a weaker reading of around 2.8% year-over-year or a weaker monthly pace could revive expectations for interest rate cuts and trigger a wave of risk-taking."
Despite the significant risks posed by rising inflation, the U.S. Federal Reserve is expected to cut key interest rates later this month and possibly again in December.
