The US federal benchmark interest rate remained in the range of 5.25% to 5.50% at the beginning of this month, announcing a pause in the pace of interest rate hikes. At 21:30 yesterday (14th), the US Bureau of Labor Statistics (BLS) released the October CPI (Consumer Price Index) report, and the data showed:

The annual CPI growth rate in October was 3.2%, slowing down from 3.7% in September and lower than the expected 3.3%;

The core CPI, which the Fed pays more attention to, was 4%, slowing from 4.1% in September and lower than the expected 4.1%, hitting a new low since September 2021.

The probability of a rate hike in December falls to 5.2%

With the release of data showing easing inflation, traders have all but ruled out the possibility of another interest rate hike by the Federal Reserve.

According to data from the CME FedWatch tool, the market generally believes that the federal benchmark interest rate will remain in the range of 5.25% to 5.50% at the December FOMC meeting, and the probability of this view has risen rapidly from 69.6% on October 13 to 99.8%. The probability of continued rate hikes has dropped sharply from the previous 28.8% to 0.2%.

In addition, the interest rate swap market also predicts that the Federal Reserve will cut interest rates by 25 basis points for the first time in June next year, while the previous expectation was in July.

At the same time, Nick Timiraos, a journalist known as the "Fed's mouthpiece," also wrote:

October's nonfarm payrolls and inflation reports strongly suggest the Fed has completed its historic round of rate hikes in July and will likely hold off on rate hikes at its December meeting.

All four major U.S. stock indexes rose

Under the influence of the decline in inflation data, the bullish momentum of the U.S. stock market was strong, and the four major indexes all achieved an increase of more than 1%. Technology stocks performed particularly well, Nvidia once again set a new record high, and Tesla's stock price soared by more than 6%:

The Dow Jones Industrial Average rose 489.83 points, or 1.43%, to close at 34,827.7.

The Nasdaq index rose 326.64 points, or 2.37%, to close at 14,094.38.

The S&P 500 index rose 84.15 points, or 1.91%, to close at 4,495.7.

The Philadelphia Semiconductor Index rose 128.83 points, or 3.62%, to close at 3,685.57.

Bitcoin, Ethereum plunge

Despite the strong performance of the U.S. stock market, after the release of CPI, Bitcoin and Ethereum experienced a brief rise and then experienced the largest selling pressure in recent times.

Bitcoin fell below $35,000 at around 2:45 this morning, hitting a low of $34,800. It has now recovered slightly and is now quoted at $35,577, down 2.14% in the past 24 hours.

At the same time, Ethereum also fell rapidly during the same period, with the lowest price hitting $1,936. The current price is $1,988, a drop of 2.82% in the past 24 hours.

Bitcoin Trends

Ethereum Trends

Why did lower-than-expected inflation cause the crypto market to plummet?

Some analysts believe that the price trend of cryptocurrencies may react faster than that of U.S. stocks, or that this may just be a normal trend after the market makers have completed their swing operations. On the other hand, there is a view that even in a bull market, a correction after a sharp rise is normal.

Currently, the price of Bitcoin has just retested the trading concentration area since the end of October, but it is still showing higher lows and higher highs. If Bitcoin can stabilize at the $34,000 level, then the uptrend may not be broken yet.

In the past 24 hours, the entire network has exploded $300 million and more than 76,000 people have been liquidated

According to Coinglass data, the dramatic market trend has caused as many as 76,923 investors to be liquidated in the past 24 hours, among which Bitcoin liquidation of approximately US$121 million ranked first, followed by Ethereum liquidation of more than US$63.85 million... The entire network liquidation exceeded US$305 million, and bulls suffered heavy losses.

Everyone, please move your hands and pay attention~

Thank you for your support, see you next time!