Finance

The U.S. consumer price index for August showed headline inflation matching consensus forecasts at 3.4% annually, but the core CPI metric rose a higher-than-expected 0.3% for the month. This sticky underlying inflation data caused market participants to sharply raise the implied probability of a 25-basis-point interest rate hike at the upcoming Federal Reserve policy meeting to over 85%.

The 10-year U.S. Treasury yield approached 5% while the policy-sensitive 2-year note climbed past 4.6%, marking their highest levels in years. Rates have been propelled upward by escalating Middle East conflicts and localized pipeline disruptions that sent Brent crude oil spiking toward $110 a barrel before cooling later in the week.

Digital asset values declined as macroeconomic headwinds and the prospect of higher interest rates dampened investor risk appetite. Bitcoin slipped below the $77,000 threshold, experiencing a downward multi-day trend that coincided with three consecutive days of outflows from spot Bitcoin ETFs.