U.S. CPI Inflation Falls To 2.4%, Bitcoin Rises

The U.S. CPI inflation has come in cooler than expectations, providing a bullish outlook for the crypto market, with Bitcoin rising amid this data release. Notably, crypto traders have again increased their bets on Fed rate cuts for this year following this macro data.

CPI Inflation Comes In At 2.4%, Bitcoin Climbs

Bureau of Labor Statistics data show that the CPI rose 2.4% year over year (YoY) in January, below expectations of 2.5%. Notably, this marks its lowest level in nearly four years, signaling that inflation may be trending towards the Fed’s 2% target.

Meanwhile, the CPI inflation data came in at 0.2% month-over-month (MoM), below expectations of 0.3%. Furthermore, Core CPI came in at 2.5% YoY, in line with expectations, while it rose to 0.3%, also in line with expectations.

The January data aligns with Wall Street’s prediction of a soft inflation reading, lower than the figures recorded in December. Bitcoin climbed on the back of this data release, rising to as high as $67,500. TradingView data shows that the leading crypto is now trading at around $67,000, up over 1% on the day.

The CPI inflation reading is a positive for the BTC price and the broader crypto market, as it strengthens the case for additional Fed rate cuts. Moreover, it comes at a time when some Fed officials, including Fed Presidents Beth Hammack and Lorie Logan, are signaling their support for a pause in more cuts over concerns that inflation is rising.

Furthermore, the CPI release follows the strong U.S. jobs report earlier this week, which reduced expectations for the number of rate cuts this year, as it suggested the labor market is rebounding. However, with this soft CPI inflation reading, crypto traders are increasing their bets on the number of rate cuts that the Fed could make this year.