Bitcoin (BTC) surged above $84,000 after the latest U.S. Consumer Price Index (CPI) data showed inflation easing more than expected in February, increasing market confidence in Federal Reserve rate cuts by mid-2025.
Key Takeaways:
U.S. CPI rose 0.2% in February, below the forecasted 0.3% and down from January’s 0.5%.
Annual inflation slowed to 2.8%, compared to expectations of 2.9% and January’s 3.0%.
Core CPI increased by 0.2% in February, missing forecasts of 0.3%, bringing the annual figure to 3.1% (vs. 3.2% expected).
Bitcoin rallied 1.5% to $84,100, while Nasdaq 100 futures gained 1.5% after the report.
Market Reactions:
The data reinforced expectations of Federal Reserve rate cuts, with markets now pricing in an 85% probability of at least one cut by June, compared to a 40% chance for May before the report.
The news provided relief to both traditional and crypto markets, which have faced weeks of uncertainty due to tariff-induced economic slowdown fears and persistent inflation above the Fed's 2% target. The S&P 500 has lost 10% over the past month, while Bitcoin had tumbled nearly 30% from its all-time high of $109,000, reached shortly before President Trump’s inauguration on Jan. 20.
What’s Next?
All eyes are now on Thursday’s Producer Price Index (PPI) report, which could either reinforce or challenge today’s inflation data, further shaping expectations for upcoming Fed rate cuts and their impact on financial markets, according to CoinDesk.
