{"id":13118,"date":"2026-09-11T16:04:25","date_gmt":"2026-09-11T16:04:25","guid":{"rendered":"https:\/\/cryptonews.uk.com\/?p=13118"},"modified":"2026-09-11T16:04:25","modified_gmt":"2026-09-11T16:04:25","slug":"cpi-and-ppi-climb-crushing-hopes-for-cheap-money-and-leaving-bitcoin-traders-with-an-expensive-dilemma","status":"publish","type":"post","link":"https:\/\/cryptonews.uk.com\/?p=13118","title":{"rendered":"CPI and PPI climb, crushing hopes for cheap money and leaving Bitcoin traders with an expensive dilemma"},"content":{"rendered":"

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US consumer prices increased faster in August, giving the Federal Reserve another reason to be cautious about lowering interest rates and leaving Bitcoin investors exposed to a prolonged period of expensive borrowing.<\/p>\n

The Consumer Price Index (CPI) rose 0.4% from July, when it increased 0.1%, while the annual inflation rate held at 3.4%. Excluding food and energy, prices rose 0.3%, compared with 0.2% a month earlier, even as the annual core rate eased to 2.4% from 2.5%.<\/p>\n

Thursday’s producer price report (PPI) showed a 0.4% monthly increase and a 5.4% annual gain. Energy accounted for much of the increase in both reports, although the faster monthly core CPI reading showed that consumer inflation also picked up outside fuel and food.<\/p>\n

That combination weakens the argument that slower annual inflation will soon bring lower interest rates. Investors holding cash can continue earning interest elsewhere, while those borrowing to invest face financing costs that reduce what they can earn from an increase in Bitcoin’s price.<\/p>\n

The Fed’s Sept. 15\u201316 meeting will put those costs back in the spotlight. The releases will enable officials to keep policy restrictive, but their decision will also depend on employment and their assessment of how long the latest price increases will last.<\/p>\n

CPI jumped on energy while core inflation accelerated too<\/h2>\n\n\n\n\n\n\n\n
Inflation measure<\/th>\nJuly monthly increase<\/th>\nAugust monthly increase<\/th>\nAugust annual increase<\/th>\n<\/tr>\n
Consumer prices, CPI<\/td>\n0.1%<\/td>\n0.4%<\/td>\n3.4%<\/td>\n<\/tr>\n
CPI excluding food and energy<\/td>\n0.2%<\/td>\n0.3%<\/td>\n2.4%<\/td>\n<\/tr>\n
Producer prices, final-demand PPI<\/td>\n0.1%<\/td>\n0.4%<\/td>\n5.4%<\/td>\n<\/tr>\n
PPI excluding food, energy, and trade services<\/td>\n0.4%<\/td>\n0.3%<\/td>\n4.7%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Source: BLS releases linked above. Monthly figures are seasonally adjusted; annual figures are unadjusted. July PPI figures reflect the latest published estimates.<\/em><\/p>\n

Gasoline prices rose 3.9% in August, accounting for more than a third of the monthly CPI increase, while shelter costs rose 0.3%. The producer report showed energy prices up 4.2%, accounting for more than three-quarters of the increase in final-demand goods prices.<\/p>\n

The concentration in energy gives policymakers a reason to look beyond the headline numbers when judging whether inflation will persist. Fuel prices can reverse, and interest rates have limited influence over the supply disruptions that can make energy more expensive. Higher fuel bills can also leave households with less money for other purchases, weakening overall demand.<\/p>\n

The difficulty for the Fed is that sustained energy increases can become part of other businesses’ costs. Transport companies may charge customers more, while manufacturers may seek to recover higher delivery expenses through their selling prices. How much reaches consumers depends on contracts and whether businesses can raise prices without losing sales.<\/p>\n

Producer prices therefore offer information about costs moving through the economy, although PPI covers domestic producers’ sales for business investment and exports as well as household consumption. Its annual rate measures a different set of transactions from CPI, so it cannot be treated as a forecast of the inflation consumers will experience next.<\/p>\n