Bitcoin Surges Past $84K as U.S. Inflation Cools More Than Expected
Inflation in the U.S. slowed more than anticipated in February, reinforcing expectations that the Federal Reserve may move forward with interest rate cuts as spring and summer approach.
According to the Bureau of Labor Statistics, the Consumer Price Index (CPI) rose 0.2% in February, falling short of the 0.3% forecast and marking a slowdown from January’s 0.5% increase. On an annual basis, headline CPI climbed 2.8%, slightly below the 2.9% estimate and easing from 3.0% in January.
Core CPI, which excludes volatile food and energy prices, also showed signs of cooling. It increased 0.2% for the month, undercutting the 0.3% expectation and slowing from January’s 0.4% gain. Year-over-year, core inflation stood at 3.1%, compared to projections of 3.2% and the previous month’s 3.3%.
Market Reaction: Bitcoin and Stocks Gain
Bitcoin (BTC) responded positively to the inflation data, climbing over 1% to $84,100 in the immediate aftermath of the report. Meanwhile, Nasdaq 100 futures extended their gains, rising 1.5%, while bonds, the U.S. dollar, and gold showed little reaction.
The past few weeks have been turbulent for financial markets, including crypto, as concerns over tariff-driven economic slowdowns and persistently high inflation weighed on sentiment. Investors had been questioning whether the Fed could ease monetary policy given inflation’s resilience above the 2% target. The S&P 500, which saw another decline yesterday, has now lost about 10% over the past month, while Bitcoin had plunged roughly 30% from its all-time high of $109,000, reached just before President Trump’s January 20 inauguration.
Rate Cut Expectations and Upcoming Data
Before the latest CPI report, traders had priced in a 40% probability of a Fed rate cut in May and an 85% chance of at least one cut by June.
Looking ahead, attention now turns to Thursday’s Producer Price Index (PPI) report, which could either confirm or challenge today’s inflation data, offering further clues on the Fed’s potential policy moves.
