Bitcoin has steadied around $80,000 after a $2,000-$3,000 drop triggered by a hawkish Fed speech and a stronger-than-expected jobs report. With the FOMC meeting set for September 15-16, traders are now looking to Friday's CPI data as the next potential catalyst.
The setup
Fed Chair Kevin Warsh's late-August speech leaned hawkish, and last Friday's jobs report added fuel. Together, they pushed odds for a rate hike well above 50%. Bitcoin reacted by shedding a few thousand dollars before finding footing near the $80,000 level.
The timing isn't great for risk assets. US markets are closed Monday for Labor Day, which thins liquidity. The 10-Year Note Auction lands Wednesday, and August PPI data follows Thursday. But the main event is Friday's CPI print.
Why CPI matters
Economists expect annual inflation around 3.3%-3.4%, with core CPI easing from July's 2.5%. A higher-than-expected reading could push Treasury yields up and put fresh pressure on bitcoin. The producer price data due Thursday will offer an early hint — headline PPI is expected at +0.4% month-over-month, with core at +0.3%. Annual producer inflation is forecast to jump from 4.7% to 5.4%.
That's a notable acceleration, and it complicates the Fed's path. If consumer prices come in hot too, the case for a hike gets louder.
What to watch
Thursday brings August Existing Home Sales data alongside the PPI release. The University of Michigan's September inflation expectations survey is also scheduled, likely Friday. Those numbers will round out the picture before the Fed sits down.
For now, bitcoin is holding its ground. The question is whether it can keep doing so if Friday's CPI lands on the high side.
