Cryptocurrencies Rebound and Rise Despite U.S. Inflation Data
Digital asset volatility surged following Federal Reserve Chair Jerome Powell’s speech before the U.S. Congress and the release of inflation data showing an uptick in core CPI.
After starting the day in the red, cryptocurrencies rebounded on Wednesday. Bitcoin (BTC) gained 1.4%, reaching $97,435, according to Binance, while Ethereum (ETH) slipped 2.8% to $2,680.
Altcoins also saw a recovery, with some climbing as much as 8.6%, led by Binance Coin, followed by Shiba Inu (+6.7%), SUI (+4.7%), and Dogecoin (+3%).
Global Economic Context
Federal Reserve Chair Jerome Powell addressed the U.S. Senate, reaffirming a cautious stance on interest rate cuts—a position the Fed had already signaled in its first meeting of the year, where rates remained unchanged.
“With our monetary policy significantly less restrictive than before and the economy still strong, there is no urgency to adjust it,” Powell explained. He also warned about the risks of cutting rates too quickly, as it could undermine progress in fighting inflation. “We will adjust our policy as needed to achieve our goals of maximum employment and price stability,” he added.
Inflation Data and Crypto
Meanwhile, the U.S. Bureau of Labor Statistics released its January Consumer Price Index (CPI) report on Wednesday, revealing that inflation rose more than expected in the first month of the year. Core prices reversed last month’s slowdown, keeping attention focused on the Fed’s future policy moves.
According to the latest data, CPI increased by 3% year-over-year in January, up from 2.9% in December. As a result, traders have pushed back their expectations for the next Fed rate cut from September to December.
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