U.S. inflation took a surprising leap in January, outpacing expectations and sending shockwaves through both traditional and crypto markets. Here's a breakdown of the latest inflation data and its impact.
January Inflation Data Surprises
- The Consumer Price Index (CPI) rose by 0.5% in January, exceeding the expected 0.3%.
- On a year-over-year basis, CPI increased by 3.0%, surpassing both the forecast and December’s rate of 2.9%.
Core CPI Also Disappoints
- Core CPI, excluding food and energy, rose 0.4% in January, higher than the expected 0.3% and December's 0.2%.
- Year-over-year, core CPI jumped 3.3%, surpassing the forecast of 3.1% and December’s 3.2% increase.
Market Reactions to Inflation Data
- The news caused a sharp decline in Bitcoin, falling below $95,000.
- U.S. stock index futures dropped by about 1%, and the 10-year Treasury yield rose to 4.63%.
- Gold fell by more than 1%, while the U.S. dollar index rose by 0.5%.
Bitcoin's Volatility Continues
- Bitcoin has been trading between $90,000 and $109,000 over the last two months, facing downward pressure from economic concerns and inflation.
- As of the latest data, Bitcoin is trading at $94,794.96 as per Coinpedia Market data.
For a more detailed Bitcoin price prediction, check out our full analysis!
Federal Reserve's Stance on Interest Rates
- Federal Reserve Chairman Jay Powell has confirmed that interest rate cuts are unlikely unless there’s an unexpected downturn in the economy or inflation.
January’s unexpected rise in inflation has sparked turbulence across markets, with both traditional assets and Bitcoin seeing significant shifts. As inflation persists, all eyes remain on the Federal Reserve’s next move and the future economic outlook.
