This marks the third consecutive monthly rise, aligning with market expectations.
Notably, Bitcoin surged past the $98,500 mark following the report.
The release of the December 2024 US Consumer Price Index (CPI) data has sparked significant attention in both economic and crypto markets. The CPI revealed a 2.9% annual inflation rate, reflecting a 0.2% increase from November’s 2.7%. This marks the third consecutive monthly rise, aligning with market expectations. Notably, Bitcoin surged past the $98,500 mark following the report, signaling investor confidence as the core CPI increase was less than anticipated.
The report, published by the US Bureau of Labor Statistics, highlighted stable monthly CPI growth at 0.3%. However, the YoY Core CPI unexpectedly dropped to 3.2%, diverging from the prior month’s 3.3% level. Despite predictions of a potential cool-down in inflation, the data underscores sustained upward pressure on prices.
All Eyes on Fed
Further influencing market sentiment, the January 24 release of US Producer Price Index (PPI) data indicated some relief. The PPI registered a 3.3% inflation rate, lower than the forecasted 3.5%, while the core PPI stood at 3.5%, also below expectations. This unexpected cooling could temper the Federal Reserve’s stance in the upcoming FOMC meeting on January 28-29, with experts suggesting that easing inflation may reduce the likelihood of further interest rate cuts.
Meanwhile, broader market dynamics remain uncertain as the crypto community braces for potential volatility surrounding the inauguration of President Donald Trump on January 20. Speculation is rife about Trump’s possible crypto-friendly policies and their implications for the sector, though any long-term impact remains unclear.
With inflation and regulatory factors in the spotlight, the crypto market’s trajectory continues to hinge on macroeconomic developments. For now, optimism prevails, but caution lingers in this high-stakes environment.
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