Bitcoin holds near $60K as January CPI seen at 2.5%

Inflation at 2.5% may open room for Fed rate cuts

With the January CPI report due tonight, inflation near 2.5% could increase the probability of federal reserve rate cuts if progress persists. Any policy shift would remain contingent on sustained, broad-based disinflation.

A 2.5% reading would signal ongoing cooling and strengthen the case that inflation is converging toward target. It would not, by itself, determine the timing or size of any easing.

What to expect in the January CPI report

As reported by Reuters, consumer prices likely maintained a steady monthly pace in January as some businesses raised prices at the start of the year. The month-over-month dynamic may differ from year-over-year trends.

AP News reports forecasts place core inflation near 2.5% year over year and headline near 2.4%, softer than December’s readings. If realized, those would be among the gentler prints in recent months.

Officials have emphasized the need for consistent evidence of progress before easing policy. “Inflation should continue to cool toward the Fed’s 2% target, which could allow room for additional rate reductions,” said Christopher Waller, Federal Reserve Governor.

According to Yahoo Finance, U.S. stock futures are eking out gains after an AI-led selloff as traders position ahead of the January CPI report. The tone suggests caution rather than conviction.

Moves in treasury yields and the U.S. dollar typically hinge on the inflation surprise versus expectations. Cooler data often lowers yields and softens the dollar, while hotter data can have the opposite effect.

At the time of this writing, Bitcoin (BTC) is about 66,436, with very high 12.19% volatility and a bearish near-term sentiment. The 14-day RSI is near 31, a neutral reading.

BLS release details and CPI methodology

Release time and BLS source

According to the U.S. Bureau of Labor Statistics, the January Consumer Price Index will be published on Friday, with the full dataset and technical notes available on its public website.

Headline vs core; YoY vs MoM defined

Headline CPI includes food and energy, while core CPI excludes those categories to reduce volatility. Year over year compares prices with the same month a year earlier; month over month compares with the prior month.

FAQ about January CPI report

If inflation is around 2.5%, how likely are Fed rate cuts and when might they begin?

If sustained near 2.5%, inflation increases the probability of fed rate cuts, but officials seek continued improvement. Timing depends on subsequent prints and labor-market conditions.

How would a hotter- or cooler-than-expected CPI print affect stocks, Treasury yields, and the U.S. dollar?

Cooler CPI generally supports equities, pressures Treasury yields lower, and softens the dollar. A hotter print typically weighs on stocks, lifts yields, and strengthens the dollar.