US Inflation Slows as Bitcoin Tests $84,000

In February, annual inflation in the United States reached 2.8% (the lowest since November), down from 3% the previous month. This figure fell short of market expectations of 2.9%.

On a monthly basis, the consumer price index rose by 0.2%, compared to 0.5% in January. The consensus forecast had anticipated a 0.3% increase.

Excluding food and energy prices, the index rose by 0.2% from the previous month and by a minimal 3.1% year-on-year, the lowest since April 2021. The previous report showed figures of 0.4% and 3.3%, respectively. Analysts had expected a slowdown to 0.3% and 3.2%.

Prices for services, excluding housing and energy, increased by 0.22% following a 0.76% jump in January. The annual rate slowed to 3.78%. The Fed noted the importance of this metric in analyzing the inflation trajectory.

Bloomberg’s global economics commentator Enda Curran highlighted that prices fell for a range of goods imported from China. In the coming months, the situation could change if these goods are subjected to higher tariffs.

Sima Shah from Principal Asset Management urged caution following the data release.

“It is worth remembering that this could be a calm CPI report before the storm. […] The introduction of tariffs will lead to at least some price increases, and the inflation picture could become even more unfavorable over the months. The Fed and markets are not yet clear,” she noted.

The net impact of President Donald Trump’s policies on inflation will depend on whether the reduction in service costs outweighs the rise in goods prices, emphasized Anna Wong and Stuart Paul from Bloomberg Economics.

The release of macroeconomic data triggered a surge in Bitcoin above $84,000 and Ethereum to $1,940, activating sellers. Ten minutes later, the quotes retained part of their gains.

Futures market traders slightly increased the odds of a Fed rate cut at the May 7 meeting. The probability rose to 40.9% from 38.9% the previous day.

The next Fed meeting is scheduled for March 19. Rohit Jain, Managing Director of CoinDCX Ventures, suggested a wave of selling following the expected maintenance of the current interest rate. The expert noted a high likelihood of Bitcoin falling to support near $70,000.

Former BitMEX CEO Arthur Hayes linked the rise in digital gold’s value to $1 million with the Fed’s shift to a stimulus policy. At a certain point, Donald Trump’s approach could trigger a recession in the economy and force the Fed to switch to supporting it, he believes.