The U.S. CPI rose 0.2% in October, aligning with estimates while core CPI increased 0.3%. Bitcoin surged above $89,000, reflecting investor optimism. Following the release of CPI data, the probability of a Federal Reserve rate cut in December also increased to 69%.

The U.S. reported a Consumer Price Index (CPI) increase of 0.2% for October, aligning precisely with economist predictions. This report revealed no change from September’s CPI rise of 0.2%. The core CPI, which disregards the more unstable food and energy categories, also rose by 0.3%, meeting expectations. Year-on-year, the CPI climbed to 2.6%, up from September’s 2.4%, while the annual core CPI remained stable at 3.3%. Following the inflation report, the price of Bitcoin ascended beyond $89,000, marking a significant weekly increase of nearly 30%. Additionally, the probability of another Federal Reserve rate reduction in mid-December surged to 69%, in response to the inflation statistics. The overall easing monetary policy has been bolstered by a recent electoral win favorable to crypto markets. As a consequence, Bitcoin approaches previous all-time highs.

The Consumer Price Index (CPI) is a critical economic indicator that reflects the average change over time in prices paid by consumers for goods and services. The core CPI is especially significant as it excludes food and energy prices, which can be erratic. Monitoring inflation trends through the CPI helps gauge monetary policy adjustments made by the Federal Reserve. A rise in the CPI generally indicates inflationary pressures and may influence the central bank’s decision-making regarding interest rates, thus impacting investment climates, particularly in cryptocurrency sectors like Bitcoin. Additionally, the interplay between political developments and economic policy significantly affects market sentiment and performance, notably in regions with supportive attitudes towards cryptocurrencies.

The latest U.S. inflation report, showing a CPI increase of 0.2% and a core CPI rise of 0.3%, closely matched analyst forecasts. Bitcoin responded positively, surpassing $89,000 due to favorable economic conditions and potential Federal Reserve rate cuts. This alignment of economic data indicates continued confidence in both traditional and digital asset markets, further influenced by recent political developments that favor cryptocurrency initiatives.

Original Source: www.coindesk.com

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