Hurry, Dump It!

Two days ago, ‘fintwit’ was full of posts explaining how lower than expected inflation numbers could lead the Federal Reserve to pump the breaks on interest rate hikes and in turn, cause risk assets to pump once more. Whether it was wishful thinking, manipulation, or just bad info, the opposite basically played out.

• The Consumer Price Index or CPI data was higher than most speculators anticipated, coming in at 8.3%. Knowing this would lead to continued interest rate hikes, market participants dumped their bags, not only in crypto but in stock markets as well, erasing recent rallies.
• Stock markets closed between 4 and 5% lower than their open, but it was crypto that saw the biggest swing, with bitcoin losing nearly 8%.
• According to CoinGlass, the volatility brought $110 million worth of liquidations across crypto derivative exchanges.
• As everyone rushed to dump their assets for dollars, the digital assets exchange FTX had its own glitches, leaving some users unable to access their accounts for about an hour. SBF apologized on Twitter alerting customers when the issue was repaired.

Although many expected the declining fuel prices to have resulted in lower prices elsewhere, the decreasing cost of fuel probably hasn’t had time to be reflected in other areas measured by the index. September CPI data will be released on October 13th, but with OPEC’s recent decision to cut back oil production, it is difficult to predict if oil prices will be enough to bring the CPI numbers back down to earth.