Key Takeaways

The PPI report on the 10th of September defied Wall Street expectations, which strengthens the chances of a Fed rate cut in September and implies short-term volatility for Bitcoin.

The U.S. annual Producer Price Index (PPI) came in at 2.6% for August, lower than the expected 3.3%.

The core PPI was 2.8% on a yearly basis, missing the analysts’ expectation of 3.5%, reported the U.S. Bureau of Labor Statistics (BLS).

This release marked the third time in 2025 that the PPI has pointed toward outright deflation. The lower core reading than expected, after coming in at 3.7% for July, was also a positive sign.

It pointed toward a Fed rate cut in September.

The CME FedWatch tool indicated a 91.1% probability of a 25-basis-point rate cut and an 8.9% probability of a 50-basis-point cut.

The likelihood of a bigger rate cut increased from 7% after the data was reported on the 10th of September.

Impact of rate cuts on Bitcoin

The background for Bitcoin [BTC] had a strongly bullish tinge. The U.S. Congress has instructed the Department of the Treasury to report on the feasibility of establishing a strategic Bitcoin reserve.

This was bullish in the long-term, but BTC also exhibited short-term weakness.

Speaking to AMBCrypto, Farzam Ehsani, Co-founder and CEO of VALR, commented on Bitcoin’s price growth, with a cautiously bullish leaning.

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Author: Akashnath S