Bitcoin Holds $114K as U.S. CPI Jumps 0.4% and Rate-Cut Bets Narrow

Bitcoin barely budged Thursday morning despite a hotter-than-expected U.S. consumer price index (CPI) report that showed inflation rising 0.4% in August, doubling July’s 0.2% increase. The Bureau of Labor Statistics said annual inflation climbed to 2.9%, pushing further from the Federal Reserve’s 2% target and complicating the central bank’s rate-cut calculus.

BTC hovered around $114,000, up 0.3% on the day, as Bitcoin ETF inflows reached an eight-week high—signaling strong institutional demand even as macro headwinds loom.

Markets now see a slimmer chance of an aggressive Fed move. According to the CME FedWatch Tool, only 9% of investors expect a 50-basis-point cut at next week’s Federal Open Market Committee meeting, down from 12% yesterday. The retreat came after the CPI release, despite Wednesday’s cooler producer price index (PPI) data, which typically leads CPI trends by several months.

The U.S. Dollar Index (DXY) reflected the cautious mood, sliding to 97.69 after briefly rebounding to 97.80 on the PPI news. Across the Atlantic, the European Central Bank held its own rates steady, citing inflation near its 2% target and an “unchanged” outlook.

Analysts warn that tariffs, food costs, and resilient service-sector prices could keep U.S. inflation sticky, potentially delaying deeper cuts and reviving stagflation concerns. For now, traders await next week’s FOMC decision to gauge how much tightening—or easing—lies ahead while Bitcoin’s price action suggests crypto investors remain unfazed.