#USinflationindex

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US Inflation Index Reaches 3.1% in January, Impact on Crypto Markets

US Inflation Index Exceeds Expectations at 3.1% in January In January, the US inflation index reached 3.1%, surpassing the forecast of 2.9% but showing improvement from the previous month's 3.4%. Experts noted that this lower rate of movement toward the target of 2% could influence the Federal Reserve's (Fed) policy regarding the key interest rate. Market Expectations Adjusted After CPI Release Following the release of the Consumer Price Index (CPI) data, market expectations have adjusted to anticipate four rate cuts in 2024, down from six just a month ago. The probability of the Fed deciding to cut rates in March is estimated at no more than 10%. Impact of Fed Rate on Cryptocurrency Prices Bitcoin reacted negatively to the US Bureau of Labor Statistics' inflation data release. At the time of writing, the cryptocurrency experienced a decline of approximately 1.8% after the press release, falling below the $49,000 mark. Bitcoin Price Predictions Amid Fed Policy Concerns Former BitMEX CEO Arthur Hayes speculated that Bitcoin could drop to $35,000 due to several factors, including Fed policy and "excessive" inflation. Conclusion: Fed Policy and Crypto Market Volatility The US inflation index exceeding expectations and the potential implications for Fed policy have contributed to market volatility, reflected in Bitcoin's price movement. Uncertainty surrounding Fed decisions and their impact on inflation will likely continue to influence cryptocurrency prices in the near term. Read the full article

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