The post Bitcoin, Ethereum Drop as US Reports Inflation Rose to 3% in January appeared on BitcoinEthereumNews.com.

Bitcoin dropped as consumer prices rose more than expected last month, indicating the pace of inflation accelerated in January after running hotter over the previous three months. The Consumer Price Index (CPI) rose 3% in the 12 months through January, the Bureau of Labor Statistics (BLS) said Wednesday. Economists expected the index, which tracks price changes across a broad range of goods and services, to show a 2.9% annual increase. In September, annual inflation had cooled to 2.4%, per the BLS. “Fed rate cuts are off the table for the time being,” Grayscale’s Head of Research Zach Pandl told Decrypt. “This is going to be unhelpful for Bitcoin over the short term as markets price out Fed rate cuts even further.” The Bitcoin price dropped to $94,250 on the back of Wednesday’s CPI print, diving 2.3% in 15 minutes. The price of Ethereum and Solana also fell to $2,600 and $193, respectively, according to CoinGecko data. Stripping out volatile food and energy prices, so-called core inflation ticked up to to 3.3% in January after showing a 3.2% increase in the 12 months through December. Used to gauge underlying inflation trends, the measure came in slightly hotter economists expected. Pandl said that January’s report may be discounted to some degree because businesses typically update their prices at the beginning of the new year, a phenomenon known as the January effect that can make it difficult to adjust inflation data for seasonal trends.Still, core inflation rose 5.5% on an annualized basis in January, representing the largest increase since April 2023. Pandl said Wednesday’s print was so hot, it may contribute to speculation of Fed rake hikes this year. Bitcoin’s price boomed as the Federal Reserve’s benchmark interest rate was lowered last year from a 23-year high to a target range of 4.25% to…

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Filed under: News - @ February 13, 2025 12:22 am