Bitcoin Dips After US Inflation Comes in Slightly Hot
The report suggests the Fed will need to continue tightening monetary policy.
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The consumer price index (CPI) for January rose 0.5% versus 0.1% a month earlier, in line with economist forecasts.
On a year-over-year basis, however, inflation was running slightly hotter than hoped, coming in at a 6.4% pace in January versus 6.5% in December and against predictions for 6.2%.
The core CPI – which strips out food and energy costs – rose 0.4% in January, also in line with expectations and flat from December's pace. Year-over-year core CPI in January was faster than forecast at 5.6% versus 5.5% expected and down from 5.7% a month earlier.
The price of bitcoin (BTC) fell about $100 in the minutes following the news, trading at $21,770 at press time. Stock index futures dipped a bit as well, with the Nasdaq 100 lower by 0.25%.
Traders are closely watching the pace of inflation, which remains elevated but has been slowing for several months. While a continued slowdown could give the U.S. Federal Reserve the space to perhaps pause its interest rate hiking cycle, Tuesday's report suggests more work needs to be done.
For now, markets continue to expect the central bank to hike its benchmark fed funds rate another 25 basis points at each of its next two meetings (in March and May) and then pause increases.
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