Bitcoin Price Remains Steady Amid Surging U.S. Inflation Data
Bitcoin (BTC) showed little immediate reaction to the latest inflation data as it continued to hover around $96,000 this morning, with pressure mounting ahead of expected tariff announcements from President Trump.
The Producer Price Index (PPI) for January revealed stronger-than-expected inflation at the wholesale level, further disappointing investors and policymakers who had hoped for signs of easing price pressures. The PPI rose by 0.4% month-over-month, surpassing economist expectations of 0.3% and up from 0.2% in December. On a yearly basis, the PPI increased by 3.5%, exceeding the forecast of 3.2% and December’s 3.3%.
Core PPI, which excludes food and energy prices, climbed 0.3% in January, meeting expectations but significantly up from December’s flat reading. Year-over-year, core PPI grew by 3.6%, slightly below the forecast of 3.7%, and down from the previous month’s 3.7%.
The data took on additional significance after the surprise surge in January’s Consumer Price Index (CPI) yesterday, which showed inflation remaining persistent. Federal Reserve Chairman Jerome Powell, who testified before Congress following the CPI report, acknowledged that there’s still much work ahead to address inflation. He also expressed interest in seeing whether today’s PPI figure would align with the concerning CPI numbers.
Bitcoin’s price was under pressure this morning, influenced not just by the inflation data, but also by anticipation of new tariff announcements from President Trump, which could add further uncertainty to the markets. Despite this, Bitcoin’s price has largely held steady, as it remains within its recent trading range around $96,000.
Markets were already pricing in only a single rate cut for 2025 before the PPI numbers were released, according to the CME Fed Watch Tool. The Federal Reserve, after reducing rates by 100 basis points late in 2024, has signaled its intention to pause any further monetary easing unless there is a clear slowdown in the economy or inflationary pressures.
In light of this data, investors and analysts are closely monitoring the Fed’s next steps and how inflation continues to shape both the traditional financial markets and the crypto landscape.
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