January PPI in the U.S. Climbs 0.4%, Outpacing Predictions; Yearly Rate Spikes to 3.5%

Bitcoin Holds Steady Amid U.S. Inflation Surge, Awaiting Trump Tariff Update

Bitcoin (BTC) remained relatively unchanged this morning, trading near the $96,000 mark, despite the latest U.S. inflation data coming in stronger than expected. The market appears to be holding steady ahead of President Trump’s anticipated tariff announcement later today, which could add further volatility to the broader economy.

The January Producer Price Index (PPI) climbed 0.4%, higher than the forecasted 0.3% and an increase from the previous month’s 0.2% rise. On an annual basis, the PPI surged 3.5%, exceeding expectations of 3.2% and slightly higher than December’s 3.3%. Core PPI, which excludes volatile food and energy prices, rose 0.3%, in line with forecasts, but an improvement from December’s flat growth. Year-over-year, Core PPI increased by 3.6%, coming in just below the forecasted 3.7%.

This latest inflation reading follows the January Consumer Price Index (CPI), which also showed stronger-than-expected price increases, putting pressure on financial markets. Federal Reserve Chairman Jerome Powell, speaking before Congress, confirmed the central bank’s intent to remain vigilant on inflation, despite recent rate cuts. With inflation not showing signs of cooling, markets are now speculating whether the Fed will hold its course or consider tightening policy further.

Bitcoin, typically sensitive to macroeconomic factors, didn’t react significantly to the data, trading within the established range it has maintained since mid-November. As the cryptocurrency market remains in a consolidation phase, traditional assets have been more volatile, particularly as traders await the impact of Trump’s tariff announcement on U.S. economic policy.

Prior to the PPI data release, markets had only priced in one potential rate cut for 2025, according to the CME Fed Watch Tool. However, with inflationary pressures continuing to persist, the outlook for monetary policy remains in flux, and traders are keeping a close eye on any signals from the Fed.

Despite the uncertainty surrounding traditional markets, Bitcoin remains relatively stable, as the broader crypto market waits for more clarity on inflation and macroeconomic conditions in the months ahead.