Inflation in the United States showed signs of moderation in February, with a 0.2% increase in consumer prices compared to January, according to Consumer Price Index (CPI) data released on Wednesday. On an annual basis, inflation fell to 2.8%, down from 3% the previous month. Following the release of the report, Bitcoin reacted upwards, surpassing $84,000.
Fed outlook and effect of tariffs
Despite the inflationary slowdown, economists warn that President Donald Trump’s tariff policies could put pressure onprices in the coming months. Core CPI, which excludes food and energy costs, also rose 0.2% on the month, bringing annual core inflation to 3.1%, down from 3.3% in January.
Markets are now focusing their attention on the next Federal Reserve meeting, where the central bank is expected to keep interest rates unchanged. According to the CME Group’s FedWatch tool, traders consider a cut at next week’s meeting unlikely.
Jerome Powell, the Federal Reserve Chairman, has recently expressed concern that tariffs imposed and planned by Trump might begin Powell’s famous phrase “to bring the sledgehammer” down on inflation, make it more complex, and challenge the economy’s projected forecast. Monitoring inflation has become an act of juggling in the latest- it is neither a headless chicken nor a seasoned stag- what remains true is it is above the Fed limit, a fact that keeps the Central Bank cagey to twist the dial in rate shifts fettered between an eye-popping 4.25 to 4.5 percent.
Economic Idleness Triggers Activity In Bitcoin
A dominant feature of the US Federal bank is in the relentlessly strict policy – until the inflation figure maps out towards Fed benchlines, the regime remains chill still. And like sprouts of grass pushing through cracks in the pavement, the shifts creates volatility to the Bitcoin blockchain. No matter the paradigm shift, the hallowed crypto remains bedbound to economic volatility and the hypothesis of future rate shifts.
Before the publication of the CPI, Bitcoin was trading above $83,000, after recovering from a fall below $80,000. In the last 24 hours, it has risen by 1.5%, according to data from CoinGecko.
