By Thursday night, BTC briefly dropped below $80,000 before bouncing back to around $82,000. The dip below $80K happened after the PPI data was released, and this time the numbers were truly brutal. September PPI rose 1.3% month-on-month, while core PPI (excluding food and energy) increased 0.7%. The market had only expected 0.3%. Logically, such data should heighten concerns about rate hikes, but prices didn’t keep falling and quickly rebounded. From my personal understanding, the market isn’t just focused on the PPI itself but more on how much of it will translate into the Fed’s preferred inflation gauge, the PCE. The components of PPI and the weightings in PCE are different, so a high PPI doesn’t necessarily mean PCE will rise by the same magnitude. After the data came out, institutions didn’t significantly revise their forecasts for September’s core PCE, so the worst fears haven’t materialized for now. Retail data also provided some cushion. September retail sales grew 0.8% month-on-month, which looks decent, but it was mainly driven by higher gas prices boosting gas station sales. The control group, which better reflects core goods consumption, only grew 0.1%, falling short of expectations. Slower growth in this segment of goods consumption means the Fed will have to consider whether further rate hikes might weaken consumption even more. Additionally, the 10-year Treasury yield dropped from over 5.3% during yesterday’s session to below 5.1% this morning, and this pullback started even before the PPI data was released. The valuation pressure from high interest rates eased slightly over the past few days. So, tonight’s rebound seems more like a post-dip recovery driven by softened rate hike concerns and reduced interest rate pressure. Next, we’ll need to watch Fed Governor Waller’s speech at 11:30 AM Beijing time on Friday. If his comments on this inflation data don’t turn noticeably hawkish, this recovery still has room to continue. But if he starts emphasizing the possibility of rate hikes, the market won’t have an easy time. One @Gate, trade more markets.