The post Inflation to set up Bitcoin melt-up as rates to fall to 2.75% by next October appeared on BitcoinEthereumNews.com.

US inflation ticked up to 3.0% year over year in September, and futures markets still price a Federal Reserve rate cut next week. Headline CPI printed 3.0% on the year and 0.3% on the month, while core CPI held at 3.0% year over year and 0.2% month over month. Gasoline rose 4.1% on the month and shelter inflation stayed near 3.6%. The Bureau of Labor Statistics published on schedule to meet Social Security cost-of-living timelines despite the shutdown backdrop. Rates traders barely shifted course after the report. CME Group’s FedWatch shows futures place the probability of a 25 basis point move at the October 29 FOMC above 90%, taking the target from 3.75% to 4.00% today toward 3.50% to 3.75%. Beyond the immediate meeting, the same FedWatch distribution puts the center of the path near 3% by this time next year. Fed funds rate probabilities (Source: FedWatch) For the October 28, 2026 meeting, the highest probabilities sit in the 2.75% to 3.25% ranges, with modest tails on either side. A simple probability-weighted midpoint of that distribution is about 2.97%, which is consistent with a glide from current levels to roughly 3% over the next year. Target range (%, Oct 28, 2026) Probability 2.50–2.75 17.6% 2.75–3.00 29.8% 3.00–3.25 28.4% 3.25–3.50 14.3% Other bins 9.9% Street road maps and rules-based estimates offer a useful cross-check. Goldman Sachs expects three cuts in 2025 and two more in 2026, which lands the funds rate in a 3.00% to 3.25% range by late 2026. The Federal Reserve Bank of Cleveland’s Simple Monetary Policy Rules dashboard shows a median rules path in the high-3s for 2026 depending on the forecast set, a reminder that sticky components of inflation can keep policy rates above the futures-implied path. The gap between futures and rules creates a hawkish risk to…

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Filed under: News - @ October 24, 2025 7:28 pm