US CPI inflation came in lower than expected in January, rising 2.4% year-on-year. This increase indirectly gave a boost to the crypto market and drove Bitcoin prices higher.
The reading was the lowest in nearly four years and suggests inflation may be moving closer to the Federal Reserve’s 2% target. The monthly CPI rose 0.2%, while core inflation remained in line with market expectations.
Following the data release, Bitcoin rose to $67,500 before trading around $67,000, up more than 1% on the day.
The softer inflation data bolstered the case for additional rate cuts by the Fed, although some central bankers had previously signaled support for a pause in cuts due to inflation concerns.
The CPI report comes on the heels of strong US jobs data this week, which had previously dampened expectations for monetary easing.
But with price pressures showing signs of easing, crypto traders are now re-raising bets that the Fed may implement more interest rate cuts this year, thus supporting risk sentiment in the digital asset market.
