US CPI reaches 2.9%, but core inflation falls below the forecast

In December, inflation reached its highest level since summer, according to data released on Wednesday morning. In December, inflation increased by 2.9% compared to last year, according to the latest Consumer Price Index. This shows how difficult the Federal Reserve is in dealing with persistent price increases. Basic Inflation Slows Down to 3.2%, Lower than Expected In December, consumers witnessed price increases for many goods and services, but the year ended with a slightly positive signal about inflation. The consumer price index increased by 0.4% in the month, leading to an annual inflation rate of 2.9%, according to a report on Wednesday by the Bureau of Labor Statistics. This figure matches the expectations of economists from Dow Jones for the annual rate but is slightly higher than the expected monthly increase of 0.3%. Excluding food and energy, core CPI rose at an annual rate of 3.2%, slightly lower than last month and better than the expected 3.3%. On a monthly basis, the core measure rose 0.2%, 0.1 percentage point lower than expected. The recent report has further complicated the Fed's interest rate decision. In November, inflation rose 0.1% to 2.7%, in line with forecasts and marking the second consecutive month of increase, after rising from 2.4% in September to 2.6% in October. This continuous increase indicates that inflation pressures are rising in the US economy. Economists warn that continuing inflation at this rate could prompt interest rate adjustments. This underlying change could impact various sectors and alter market trends. Bitcoin Could See a Decline to $90,000 Recent CPI reports have pushed Bitcoin prices up to $99,000. However, this upward trend is expected to slow down in the coming hours. Since mid-December 2024, the value of Bitcoin has dropped from $106,000 to around $97,000 on January 14, 2025. The derivatives market is currently overheated and there are many open Bitcoin futures contracts, indicating excessive leverage. Steno Research notes that this leverage needs to be reduced, which could lead to more selling pressure. In addition, the strength of the US dollar has damaged Bitcoin. After the strong job report on January 10 showed that the interest rate cuts could slow down, the dollar rose, which caused the price of Bitcoin to decrease. Over the past month, the correlation between BTC and Nasdaq has increased, reaching its highest level in 2024 with the current 30-day correlation. Furthermore, the recent surge in cryptocurrency prices has been somewhat limited due to investor concerns about the Federal Reserve's ability to maintain higher interest rates for an extended period of time. DYOR! #Write2Earn #Write&Earn $BTC {spot}(BTCUSDT)