US inflation rose unexpectedly in January, significantly lowering crypto and traditional markets.
The closely viewed consumer price index (CPI) rose 0.5% in January, compared to the expected 0.3% and 0.4% pace in December. Compared to the previous year, CPI was 3.0% higher than forecast at 2.9% and 2.9% in December.
The so-called core CPI, which excludes food and energy costs, rose 0.4% in January, compared to the expected 0.3% and 0.2% in the previous month. Compared to the previous year, CORE CPI was 3.3% higher, 3.1%, and 3.2% in December.
As Bitcoin (BTC) prices have fallen sharply following the unfortunate report, falling below the $95,000 level as they are already trading on a downward trend this week. The Broad Coindesk 20 index has been down 2.9% over the last 24 hours.
US stock index futures fell by about 1% on the news, with Treasury yields jumping to 4.63% in 2010 to 10 basis points. Gold was soaked over 1%, and the dollar index rose 0.5%.
After beating $100,000 shortly after Donald Trump's election victory in November, Bitcoin has now traded between $90,000 and $109,000 for over two months. AI-led China's concerns, the threat of a trade war, and what is higher than desired interest rates due to the ongoing strength of the economy and inflation all curtail prices.
Testifying before Congress yesterday, Federal Reserve Chairman Jay Powell reiterated that additional central bank interest rate cuts are likely off the table for a foreseeable future, and the economy or inflationary Either way, we eliminated an unexpected slump.
Today's inflation data could potentially set a stage in 2025 when the market begins pricing prices for rate hikes and a retest of the $90,000 area of Bitcoin.
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