US inflation expands 0.5% month-on-month in January, meets estimates; crypto markets dip

Inflation in the U.S. rose by 0.5% month-on-month and 6.4% year-on-year in January.

Today’s data is above Dow Jones estimates of 6.2% year-on-year but in line with the month-on-month consensus. Goldman Sach economists had estimated inflation would rise by 0.55% month-on-month, above the Dow Jones 0.5% estimate. The investment bank correctly estimated the year-on-year increase would come to 6.4%.

source: www.bls.gov/cpi/

Today’s inflation figure is, for the first time, being calculated under the BLS’s new weighting system. Consumer Price Index (CPI) will be based on a single calendar year of data, using consumer expenditure data from 2021. Previously the data was calculated using two years of expenditure data.

Macro markets diverged significantly leading into the print «with rates and equities heading in opposite directions and BTC caught in the middle,» QCP Capital noted earlier.

Today’s print was crucially important, said the crypto trading firm, due to the renewed regulatory threat. Bitcoin was trading around $21,680 by 8:40 a.m EST, down 0.8% in the ten minutes following the release, according to TradingView data.

BTCUSD chart by TradingView

Crypto markets had been trading lower over the past week, driven down by the SEC’s enforcement action against Kraken.

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