Market update - November 13th, 2026

Hot CPI puts a 50bp hike on the table, and Bitcoin holds its range

Bitcoin has spent another week grinding rather than collapsing, which in the circumstances is almost an achievement. October CPI came in hotter than expected, even if the headline monthly rate eased to 0.4% from September’s 0.6%.¹ More troubling was the composition. Food rose 0.5%, services remained firm and core CPI increased 0.3%, with services excluding rent, a gauge of domestic price pressure the Fed watches closely, rising 0.5%.¹ The inflation problem is therefore no longer easily dismissed as an oil story. Some of the earlier energy shock appears to have bled into the broader economy.

The Fed’s hurdle, cleared

Markets responded in fairly predictable fashion. The 10-year Treasury yield jumped back towards 5%, expectations for tightening in December and into early 2027 rose sharply, and discussion quickly moved from whether the Fed hikes in December to whether 25bp is enough. Fed Governor Christopher Waller had rather unfortunately set the hurdle only hours before the release, saying that another core print around 0.3% or higher should put a half-percentage-point (50bp) move into consideration, arguing that a smaller increase could risk Fed credibility.² The October number landed almost exactly on that threshold.

We remain sceptical that 50bp is the most sensible response. Inflation data are backward-looking, oil has fallen close to a fifth from its recent peak and financial conditions have already tightened considerably following last week’s equity sell-off. Three firm core readings make a case for persistence, not for an emergency, and the Fed has little precedent for treating them as one. September’s energy surge was significant, with gasoline up 9.1%,³ while October energy inflation slowed dramatically to 0.7%.¹ If that continues, some of the pressure feeding into services should begin to fade, although damage to refining capacity means a return to pre-Iran gasoline prices is unrealistic.

Bitcoin absorbs the repricing

Bitcoin has reacted negatively to the repricing in rates, but once again the interesting feature is how little it has fallen relative to the scale of the macro shock. Our base case remains that Bitcoin trades broadly between US$60K and US$90k until something materially changes. There is no obvious catalyst for a sustained breakout at present. Monetary policy is moving in the wrong direction, whale selling has picked up again after a brief period of accumulation, and weaker sentiment across AI and technology is removing another source of risk appetite.

The perverse upside: the bond market

The slightly perverse upside scenario remains the US bond market itself. If yields were to move towards 6% or 7%, the fiscal consequences would become increasingly uncomfortable and pressure would mount for the authorities to intervene more aggressively in Treasury markets. At that point the conversation moves away from whether Bitcoin dislikes higher rates and towards whether investors trust the monetary response required to contain them. That would be a very different catalyst.

Patience over prediction

For now, however, patience is probably required. Bitcoin’s resilience has been impressive, but resilience is not the same thing as a breakout. Without a meaningful change in Fed expectations, a sustained improvement in institutional flows or a return of whale accumulation, range trading remains the more plausible outcome.

Sources

1. US Bureau of Labor Statistics, Consumer Price Index, October 2026, released 10 Nov 2026

2. Federal Reserve Board, Governor Christopher Waller, speech on the economic outlook, 10 Nov 2026

3. US Bureau of Labor Statistics, Consumer Price Index, September 2026, released 14 Oct 2026