U.S. CPI Inflation Comes In At 2.7%, Bitcoin Rises

The December U.S. CPI inflation data have come in line with expectations, signaling that inflation in the country remains steady despite concerns that it may potentially trend higher due to the Trump tariffs. Bitcoin broke above $92,000 on the back of the data release, which strengthens the case for more rate cuts.

December CPI Inflation Comes In At 2.7%

Bureau of Labor Statistics data show that CPI inflation remained at 2.7% year-over-year in December, in line with expectations. Inflation rose to 0.3% month-over-month (MoM) last month, also in line with expectations.

Meanwhile, the core CPI came in at 2.6% YoY, below expectations of 2.7%, while the inflation data came in at 0.25 MoM, also below estimates of 0.3%. Notably, this mirrors the November inflation figures, with the CPI and core CPI coming in at 2.7% and 2.6%, respectively.

Bitcoin rose on the back of the CPI inflation data release, rising to as high as $92,400. The flagship crypto is trading just above $92,000 at press time, up almost 2% in the last 24 hours.

The inflation figures are a positive for BTC and the broader crypto market, as it supports the case for more Fed rate cuts, which is bullish for these crypto assets. Notably, the last FOMC minutes had shown that most Fed officials support lowering rates if inflation comes down as expected.

Furthermore, the CPI data confirm that inflation remains steady despite concerns about the impact of Trump’s tariffs. It is also worth mentioning that New York Fed President John Williams had stated that the November data was likely distorted due to the government shutdown. However, this December data confirms that inflation isn’t trending upwards.

Meanwhile, the Fed is still expected to hold rates steady amid this development. CME FedWatch data shows a 95% chance that the committee will leave rates unchanged at the January FOMC meeting. There is only a 5% chance that the Fed will lower rates by another 25 basis points (bps) after making three rate cuts last year.