Bitcoin Faces Sept. 16 Fed Test as Core Inflation Slides From 4.76% to 3.05%

Bitcoin Faces Sept. 16 Fed Test as Core Inflation Slides From 4.76% to 3.05%

Dr. Guneet Kaur

Sat, September 5, 2026 at 7:17 PM GMT+3 4 min read

• BTC-USD +0.83%

Key Takeaways

• Bitcoin climbed back above $80,000 after Fed Governor Christopher Waller said cooling inflation could justify leaving interest rates unchanged in September.

• Three-month core inflation has fallen from 4.76% in February to 3.05% through July, according to Waller, although annual PCE inflation remains well above the Fed's 2% target.

• Markets are almost evenly divided over a Sept. 16 rate hike, making the upcoming August CPI report a major test for Bitcoin.

Bitcoin has returned above $80,000 as a sharp improvement in short-term US inflation data gives crypto traders a new reason to question whether the Federal Reserve will raise rates on Sept. 16.

BTC briefly reached about $81,400 on Sept. 3, its highest intraday level since May, after Federal Reserve Governor Christopher Waller signaled that he could support keeping rates unchanged if inflation continues to cool.

The change in tone matters because expectations had swung sharply toward another rate hike after Fed Chair Kevin Warsh's hawkish Jackson Hole speech.

Core Inflation Drops Sharply Ahead of Fed Decision

Waller's argument rests on a measure that looks considerably better than the inflation numbers.

Three-month core inflation fell to 3.05% through July, down steadily from 4.76% in February.

"That is a considerable improvement, and the speed of this downward trajectory is encouraging," Waller said.

The figure excludes food and energy and measures the recent annualized pace rather than year-over-year inflation. Annual PCE inflation remains 3.7%, while core PCE is 3.3%, both above the Federal Reserve's 2% goal.

Waller also said some earlier inflation pressures from tariffs and energy appear to have passed through without creating the persistent spillovers he initially feared.

He stopped short of declaring victory.

"If there is continued progress toward our 2% goal, then I am willing to support holding the policy rate at its current level," Waller said, while warning that unexpectedly strong August inflation could justify a hike.

Gold advocate Peter Schiff pushed back on Waller's remarks, arguing that being willing to "consider" a rate hike is very different from committing to one. Schiff also questioned whether a 25-basis-point increase would be enough to meaningfully cool inflation if price pressures reaccelerate.

Pointing to gold's latest move, he noted that the metal had climbed by more than $100, suggesting markets may still be pricing persistent inflation risk despite the Fed's more cautious stance.

Bitcoin Now Has a Sept. 16 Macro Test

The Federal Reserve will meet on Sept. 15–16, with its rate decision scheduled for 2 p.m. ET on Sept. 16.

Markets remain unusually divided.

After Waller's comments, expectations for a September hike fell from roughly 59% toward 50%, while two-year Treasury yields declined and the dollar weakened.

That is potentially supportive of Bitcoin. Higher rates generally strengthen yields on safer dollar-denominated assets and tighten financial conditions, while lower rate expectations can boost demand for risk assets.

The Fed itself is divided. At its July meeting, policymakers voted 9–3 to keep rates unchanged, with three officials preferring a 25-basis-point increase.

The next major trigger is the August CPI report, due before the Fed meeting.

Bitcoin therefore enters September in an unusual position: inflation momentum is improving enough to challenge the rate-hike case, but not enough to rule it out.

For BTC, the difference between another push above $80,000 and renewed pressure could now hinge on whether the next inflation print confirms Waller's 4.76%-to-3.05% disinflation trend or abruptly reverses it.

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