Crypto shrugs at CPI report as investors await Fed’s next move

August CPI did little to get crypto moving, leaving big players like Bitcoin stuck in neutral. With the Fed’s next call on rates just around the corner, the market’s collective shrug feels less like uncertainty and more like a deliberate holding pattern.

The numbers from the Bureau of Labor Statistics on September 11th showed the Consumer Price Index climbing to a 2.9% annual rate, edging up from July’s 2.7% on the back of persistent energy and grocery bills.

Meanwhile, the core CPI reading, which strips out those unpredictable food and energy costs, held firm at 3.1%. The data landed against a complex backdrop of rising jobless claims and revised payroll numbers that painted a murkier picture of the underlying economy.

For crypto traders, the latest CPI report did not appear to be a main event. Risk markets treated its arrival as the final piece of macroeconomic scenery set before next week’s true headliner: the Federal Open Market Committee’s policy decision.

Crypto’s muted response to CPI report underscores broader caution

The total crypto market cap edged up 0.18% to $3.96 trillion, yet the move concealed a lack of conviction beneath the surface. Bitcoin (BTC) was essentially unchanged at $114,221, with Ethereum (ETH) and Ripple (XRP) sliding more than 0.5% each over the past 24 hours, according to crypto.news data.

Sentiment indicators added further nuance. The Crypto Fear & Greed Index held firm at a “Neutral” 47 following the data drop. This reading is more telling than a dramatic swing. It signifies a market consciously withholding its emotional response, unwilling to commit fully to risk until monetary policy becomes clearer.

The index has been anchored in this neutral territory all week, barely budging from 43 yesterday and 44 last week. This stability is a stark contrast to the “Greed” mode of 62 seen just last month and the “Extreme Greed” of 88 that marked the yearly high.

What’s next?

August’s CPI report presented the Fed with a thornier challenge. Shelter costs climbed 0.4% on the month as food prices rose 0.5%, with grocery staples like beef and produce leading gains. Gasoline jumped 1.9% after recent declines.

This crosscurrent is shaping rate expectations heading into the September 17–18 Federal Open Market Committee meeting. Markets now assign an 88% chance of a quarter-point cut and an 11% probability of a deeper half-point move, according to CME FedWatch.

By year-end, traders are still betting on a cumulative 75 basis points of easing. The softer labor backdrop has pushed some to price in more aggressive action, even as inflation data tempers enthusiasm.