Bitcoin rose past $85,000 after August inflation data came in below expectations, reducing the chance of a Fed rate hike.
Bitcoin's price edged higher Wednesday after fresh data showed inflation increased at a slower pace than had been forecast.
The Federal Reserve's preferred inflation measure, the personal consumption expenditures price index, rose 3.4% on a headline basis in August and 3% for core inflation — both figures fell well short of what economists had projected.
Bitcoin was recently trading at $84,246 after spiking to $85,518 at one stage during Wednesday morning in New York.
The weaker-than-expected inflation data reduces the likelihood that the Fed will raise interest rates at its October meeting. Elevated inflation had been pushing the U.S. central bank toward a more aggressive monetary policy stance.
Kevin Warsh, in his first remarks as Fed chair back in August, stated that the central bank still had "more work to do" to combat inflation.
The following month, the Fed raised interest rates. "The plain fact is that inflation is too high, and has been for too long," Warsh said at that time.
Bitcoin's price appeared to largely ignore that rate increase and posted a solid performance during the week that followed.
The cryptocurrency hit as high as $87,158 earlier this month. Some analysts have suggested investors are unfazed by the rate move because they do not anticipate a sustained series of rate hikes from the Fed.
Bitcoin has also been on an upward trend since the U.S. Treasury announced plans to more than double the scale of its government debt buybacks.
JUST IN: US Treasury Department to buy back up to $6 billion in longer-term debt AGAIN tomorrow
— Bitcoin Magazine (@BitcoinMagazine) September 30, 2026
Buy Bitcoin pic.twitter.com/0fc6V7u4oH
Historically, bitcoin has performed well alongside other risk-on assets during periods of low interest rates.
U.S. President Donald Trump has repeatedly called on the Federal Reserve to cut interest rates.
Last year, Trump threatened to dismiss then-Fed Chair Jerome Powell, saying he had done a "bad job" by not lowering rates.
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Disclaimer: this article comes from third-party media and is provided for reference only. It does not constitute investment advice. Crypto and other financial products carry significant price volatility risk, so please make your own decisions carefully.
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