U.S. Inflation Heats Up, Raising Market Uncertainty

January's U.S. Consumer Price Index (CPI) report revealed inflation running slightly hotter than anticipated, with annual inflation rising to 3% from December's 2.9%.

This unexpected increase has raised concerns among investors, particularly in the crypto sector, where sentiment has been fragile due to broader economic uncertainties and the Federal Reserve’s firm stance on monetary policy.

The latest data from the Labor Department showed a monthly inflation increase of 0.5% for January, up from 0.4% in the previous month. Market expectations had predicted a milder rise, making this figure a cause for concern.

Meanwhile, Core CPI, which strips out the more volatile food and energy prices, climbed by 0.4% for the month—doubling December’s 0.2% increase.

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On an annual basis, Core CPI reached 3.3%, slightly higher than the 3.2% recorded in December and surpassing Wall Street’s 3.1% forecast.

Alexander Stefanov