This week in markets: Bitcoin and ether edge lower while altcoins suffer heavy losses

Bitcoin and ether edged lower this week after whipsawing on Thursday following the latest inflation figures out of the U.S.

Bitcoin was trading at $19,135 today, down 1.33% over the past week, while ether shed 2.15% in the same period to trade at $1,284, according to data via Coinbase. 

Meanwhile, altcoins suffered heavier losses throughout the week, with ADA trading down more than 13% at $0.36 and SOL losing 7.89% to trade at $29.95.

U.S. inflation comes in hot

U.S. inflation data came in hotter-than-expected on Thursday as core inflation hit a 40-year high. 

Inflation was up 0.4% month-on-month from August and the year-on-year reading was 8.2%, according to the latest CPI data. Meanwhile, core inflation came in at 6.6% year-on-year — the biggest increase since 1982. 

Thursday's data suggests the Fed won't curb its interest rate hikes anytime soon, with the market now pricing in a 97% chance of a 75 basis points increase at the next meeting in November, according to the CME's FedWatch tool.

While fear continues to mount, markets don't seem to be predicting a 100 basis point raise from the Fed just yet, Youwei Yang, chief economist at Bit Mining told The Block.

"We probably won’t see anything like a disorderly dump of stocks, but rather some highly leveraged portfolios decreasing their risk exposures to avoid more extreme volatility. The market overall has been gradually dropping year to date, despite a few small rallies, and many contrarians have already called this the bottom," Yang said.

A 75 basis point rate hike would bring the target Fed Funds rate to 3.75-4%, from its current position of 3-3.25%, as seen above and according to data via the Bureau of Labor Statistics and the U.S. Federal Reserve. 

The target rate is expected to climb well above 4% by the end of the year. JPMorgan's Marko Kolanovic said on Monday that the Fed policy rates may approach 5% next quarter.