Bitcoin Stays Steady as U.S. Inflation Data Surprises, Markets Await Tariff Update
Bitcoin (BTC) traded relatively flat this morning, holding around the $96,000 mark, despite a stronger-than-expected inflation report out of the U.S. The cryptocurrency appears to be in a holding pattern, awaiting President Trump’s upcoming tariff announcement, which is expected to have significant implications for the economy.
The January Producer Price Index (PPI) rose by 0.4%, surpassing economists’ expectations of a 0.3% increase and up from December’s 0.2%. On a year-over-year basis, the PPI climbed by 3.5%, higher than the forecasted 3.2% and December’s 3.3%. Core PPI, which excludes food and energy costs, rose by 0.3%, matching expectations and slightly higher than the 0% increase seen in December. Year-over-year, Core PPI showed a 3.6% increase, beating the expected 3.3% but falling just short of December’s 3.7%.
This inflation data follows the January Consumer Price Index (CPI), which also came in stronger than expected, leading to concerns about persistent price pressures. Federal Reserve Chairman Jerome Powell, speaking after the CPI release, acknowledged the need for more work on inflation, signaling that the central bank will remain cautious in its approach.
Despite these inflationary pressures, Bitcoin showed little reaction, maintaining its position within the established trading range it has held since mid-November. This stability comes amid broader market volatility, with traditional assets responding more actively to the inflation data and the anticipated tariff news.
The PPI report has taken on heightened significance following the CPI shock, as Powell indicated that today’s data could provide further insights into the inflationary trends the Fed is monitoring. With only one rate cut currently priced in for 2025, according to the CME Fed Watch Tool, markets are keenly awaiting any signals from the Federal Reserve regarding future monetary policy moves.
As Bitcoin remains range-bound, investors are looking for further developments that could influence the cryptocurrency market, with both inflation and potential tariff changes adding to the uncertainty in the short term.
