December inflation reached its highest since the summer, with rising consumer prices posing challenges for the Federal Reserve.
December Inflation Data
Inflation in December rose by 2.9% over the previous year, according to the latest Consumer Price Index. This illustrates the difficulty the Federal Reserve faces in handling price increases that are more persistent than expected.
Core Inflation Deceleration
Despite the overall price rise, core inflation slowed to an annual rate of 3.2%, below the expected 3.3%. On a monthly basis, the core measure increased by 0.2%, 0.1 percentage points below expectations. This complicates the Federal Reserve's decision on interest rates.
Impact on Cryptocurrency Market
Following the CPI report, Bitcoin's price rose above $99K, but this momentum may slow down. Since mid-December 2024, Bitcoin's value has fallen from $106,000 to approximately $97,000 by January 2025. A strong US jobs report has boosted the dollar, impacting cryptocurrency. Bitcoin is also under pressure from a high correlation with Nasdaq and investor concerns over the stability of high interest rates in the future.
Economists warn of potential interest rate changes amid ongoing inflation growth, which can impact various economic sectors and markets, including cryptocurrencies.
