While the headline U.S. Consumer Price Index (CPI) came in as expected last month, the core rate rose more than economist forecasts, likely sealing the deal for the Federal Reserve to cut its benchmark lending rate by just 25 basis points next week.

The CPI rose 0.2% in August versus economist forecasts for 0.2% and 0.2% in July. On a year-over-year basis, CPI was higher by 2.5% against expectations for 2.6% and 2.9% in July.

Core CPI – which excludes food and energy costs – rose 0.3% in August, faster than a forecast 0.2% and 0.2% in July. The core rate year-over-year was 3.2% against an anticipated 3.2% and 3.2% in July.

Down marginally for the day coming into the inflation print, the price of bitcoin (BTC) fell a bit more in the minutes following the news, now lower by 1.5% over the past 24 hours to $56,500.

Ahead of the data, markets had priced in a 71% chance the Fed would trim its benchmark fed funds rate range by 25 basis points to 5%-5.25% when it meets next week, with a 29% chance the central bank cuts by 50 basis points to 4.75%-5%, according to CME FedWatch. The stubborn persistence of core inflation – which the Fed often prefers to the headline number – is likely to solidify expectations of the Fed just moving by the lower amount.

Indeed, 15 minutes following the CPI release, the chances of the Fed cutting by 25 next week has jumped to 85%. A check of months further out finds the odds that the Fed slashes rates by just 75 basis points by year-end has risen to 14% versus 9% one day ago.

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