Inflation under control. The Federal Reserve (the Fed) is mainly interested in two economic statistics to guide its monetary policy. On the one hand, these are the figures of US employmentand on the other hand figures of l’inflation. And in fact, today has just fallen on CPIthat is to say the consumer price index in the USA. And good news (especially for Bitcoin), inflation seems stabilizedand in any case it has not increased.
The key points of this article:
Inflation in the United States remained stable, with the Consumer Price Index (CPI) unchanged at 2.7% year-on-year.
This stabilization could influence the monetary policy of the Federal Reserve, increasing speculation of a reduction in interest rates, which would be favorable for Bitcoin and the cryptocurrency markets.
Inflation unchanged: the CPI remains at 2.7% in the United States
This Tuesday, January 13, 2025, the Bureau of Labor Statistics (BLS) announced the figures linked to CPIor Consumer Price Index. And it turns out that l’inflation consumer prices in the USA is remained at 2.7% over a rolling year, exactly as for the previous month's CPI update (December). Furthermore, the statistic is according to to expectations of the market, since this figure of 2.7% was also the one projected (see graph below). It has been more than a year since US inflation has stagnated quietly at around 3% (and even rather below). It will be noted that on the side of CPI Corewhich does not take into account categories subject to more volatility such as food and energy, it is the same observation of stabilisation. In fact, the latter remained at 2,6% over a rolling year, as before. Except that here, it is better than the projections, since the market consensus expected an increase to 2.7% (which therefore did not happen).
CPI inflation stabilizes at 2.7% in the United States. – Source: investing.com
Stabilization of US inflation could favor Bitcoin, increasing the chances of a Fed rate cut
If the CPI figures are so important for the financial markets, it is in particular because they are very followed by the Federal Reserve of the United States. If the central bank has set itself an (too) optimistic 2% target for inflation, its current and lasting stagnation below 3% distant the risk of an increase in consumer prices. However, this risk was until now a pretext for not lowering (or at least not too quickly) the key rates of the Fed. This, despite the pressing requests of President Trump himself (see his message below) for an acceleration of these declines. It must be said that this reduction in interest rates from the US central bank favored notably the markets of “risk-on” assetslike the actions and the cryptocurrencies. However, depending on the tool FedWatch of the CME Group, and in view of the stubbornness of Jerome Powell (president of the Fed) not to lower these key rates quickly, market players do not even see 3% chance reduction for the next meeting of the FOMC (Federal Open Market Committee), on January 28. These chances, however, rise to more than 25% for the next meeting, March 18, 2026.
“Great (LOW!) US inflation numbers. This means Jerome “Too Late” Powell should lower interest rates, SIGNIFICANTLY!!! If he doesn't, he will just continue to be «Too Late»! (…) »
Donald Trump, President of the United States of America
Social Truth Account.obstinacy of Jerome “Too Late” Powell (dixit Donald Trump) not to rush to lower rates probably explains why, at the time of writing (shortly after the publication of the CPI figures), the Bitcoin and crypto market only seems to show a very slight bullish jumpof the order of +1% for BTC. However, with the end of term the Powell and May 2026and its probable replaced by the Kevin Hasset Pro-criptothere is a good chance that this reduction in rates accelerates soon.