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The headline CPI rose 0.4% month-on-month, slightly above November’s 0.3%, with an annual increase of 2.9% — matching analyst expectations. Core CPI, excluding food and energy costs, climbed 0.2% month-on-month, in line with forecasts.
Economists see the core gauge as a better indicator of the underlying inflation trend than the overall CPI that includes often-volatile food and energy costs.
However, its annual rate unexpectedly dipped to 3.2%, below the anticipated 3.3% and November’s reading of 3.3%.
The Federal Reserve has expressed concerns about the stubbornly high core inflation rate, even as headline inflation declines. Bitcoin, which has traded mostly below $100,000 in January, capitalised on the inflation dip, pushing closer to the psychological mark.
Also read: US Markets LIVE Updates: Core inflation rate slows to 3.2% in December; Dow futures surge 500 points
Traditional markets also reacted positively. US stock index futures rose 0.5%, while bond yields and the dollar dropped sharply.
Earlier in the week, CoinDesk data showed Bitcoin rebounding to $97,000 following a cooler-than-expected Producer Price Index (PPI) report. However, hawkish comments from Federal Reserve Chair Jerome Powell and robust economic data have kept market participants cautious, dampening hopes of rate cuts in 2025.
(Edited by : Shoma Bhattacharjee)
