Persistent Inflation Sets Stage for Crypto Rally as Fed Faces December Decision
September's delayed PPI report reveals stubborn inflation with a 0.3% monthly rise (2.7% annual), particularly driven by energy and food commodities. Core PPI's 2.9% annual gain exceeds forecasts, maintaining pressure on the Fed.
Markets now price a 90% probability of December rate cuts, creating asymmetric risk for digital assets. Cryptocurrencies stand to benefit disproportionately from accommodative policy, while status quo could trigger sharp corrections.
The commodities breakdown shows gasoline (+11.8%), meats, and corn leading inflationary pressures, contrasting with stable services sectors. This bifurcation complicates the Fed's reaction function as it balances growth risks against inflation containment.