TLDR
- September’s US inflation report, delayed by the government shutdown, is scheduled for release on Friday and is expected to show a 3.1% annual increase
- The 3.1% figure would mark the first time inflation exceeds 3% in 2025 and the highest rate in 18 months
- Economists predict the Federal Reserve will still cut interest rates by a quarter-point next week, with a 98.3% probability according to CME futures markets
- Ether could experience larger price swings than Bitcoin following the data release, with projected moves of 2.9% compared to Bitcoin’s 1.4%
- Bitcoin briefly spiked above $111,000 on Thursday while the overall crypto market capitalization reached $3.8 trillion
The US Bureau of Labor Statistics will release September’s Consumer Price Index on Friday after delays caused by the ongoing government shutdown. The shutdown has now lasted 24 days.
ā ļøWHATāS YOUR PREDICTION FOR THE US CPI INFLATION REPORT ON FRIDAY?
ā¢ ESTIMATE: 3.1%
ā¢ PREVIOUS: 2.9%$DIA $SPY $QQQ $VIX šŗšø šŗšø pic.twitter.com/n8zZmYJ13T
— Investing.com (@Investingcom) October 23, 2025
Economists forecast that September inflation rose 0.4% monthly and 3.1% annually, according to Trading Economics. This would mark the first time headline CPI exceeds 3% in 2025.
The report represents the first major economic data release since the government shutdown began earlier this month. Market observers across traditional and crypto markets have been waiting for fresh economic indicators.
Impact on Interest Rates
Investor Ted Pillows stated that if CPI reaches 3.1% or higher, the odds of a rate cut could decrease. However, a reading at 3% or lower would be positive for markets.
Tomorrow's CPI data will be crucial for the market.
It will be released at 8:30am ET.
The expectations are at 3.1%, while last month's CPI was 2.9%.
This will be the first major data release since the U.S. government shutdown 22 days ago.
Given that last month's CPI was 2.9%,ā¦
— Ted (@TedPillows) October 23, 2025
Analyst Ash Crypto noted that a figure higher than 3.1% would be bearish because it would represent the highest CPI print since June 2024. A reading around 3.1% would align with expectations.
The Federal Reserve appears focused on the weakening labor market rather than inflation alone. CME futures prediction markets show a 98.3% probability of a rate cut next Wednesday.
Matt Maley, chief market strategist at Miller Tabak, told Bloomberg that while the Fed emphasizes employment data, CPI figures could still impact their decision-making. The data could have a big impact on markets if it differs from consensus expectations.
Expected Market Volatility
According to Deribit-listed options market data, ether could move by 2.9% following the CPI release. Bitcoin is expected to move by 1.4%.
Markus Thielen, founder of 10x Research, confirmed these projections from the options market. The one-day implied volatility indices for XRP and Solana stand at 91% and 76% respectively.
This translates to expected price moves of approximately 4.7% for XRP and 4% for Solana within 24 hours. These projected moves reflect volatility in either direction.
Current Market Conditions
Crypto market capitalization has increased 1.8% over the past 24 hours to reach $3.8 trillion. Bitcoin briefly spiked above $111,000 in late trading on Thursday.
At the time of reporting, Bitcoin traded around $110,500. The market has shown modest gains ahead of the inflation data release.
John Toro, head of trading at Zerocap, said the government shutdown has deprived market analysts of crucial data. A lower CPI reading could stoke bullish sentiment following the crypto pullback two weeks ago.
ING analysts expect a consensus 0.3% month-over-month core print. They noted that with 50 basis points of easing fully priced in by year-end, any hot print could support the dollar.
Core inflation, which excludes food and energy categories, is forecast to have increased by 3.1% for the third straight month. The monthly gain is expected to be 0.3%.
The consensus among analysts is that the data will not deter the Fed from cutting rates. Barron’s reported that hotter-than-expected inflation figures will not likely change the central bank’s plans.
Thielen’s analysis of the Stochastic indicator suggests potential bullish divergence for Bitcoin. The daily stochastic indicator shows signs that downside momentum may be easing, potentially allowing for a short-term recovery in Bitcoin prices.
