The US Bureau of Labor Statistics has released its Consumer Price Index (CPI) data for February. The data showed that inflation in the world’s largest economy eased to 2.8% year-on-year (YoY), down from 3% in January. The initial estimate was for an inflation rate of 2.9%.
📊 US CPI: +2.8% (Expectation: +2.9%)📊 US Core CPI: +3.1% (Expectation: +3.2%)
The announcement of the lower inflation figure had a positive impact on the crypto market, with the price of Bitcoin (BTC) surging above $84,000 shortly after the data was released.
The decline in inflation brings the rate closer to the 2% target set by the Federal Reserve (Fed) as a healthy zone for the economy. The Fed constantly monitors CPI data as it is a key factor influencing any interest rate adjustments.
The Fed has cut interest rates three times in 2024, but has yet to do so in 2025. A few months ago, the US central bank forecast two more rate cuts this year, potentially bringing rates down to a range of 3.75% – 4.00%.
If interest rates are cut, it will make borrowing money cheaper and could boost interest in risky assets like Bitcoin.
Meanwhile, Core CPI—which excludes more volatile sectors like food and energy—rose 3.1% on an annualized basis, slightly below expectations of 3.2%.
