According to Blockworks, stocks slipped and cryptocurrencies showed mixed results on Tuesday morning after the latest consumer price data revealed that inflation is more persistent than economists had anticipated. January's consumer price index (CPI), which measures goods and services across the country, increased by 0.3% from December. Prices have risen by 3.1% year-over-year, according to data from the US Bureau of Labor Statistics. Analysts had predicted a 0.2% gain for the month and a 2.9% annual increase.
The S&P 500 and Nasdaq Composite indexes experienced a rocky start on Tuesday morning, losing 1.4% and 1.7% respectively. Bitcoin (BTC) lost around 0.4% Tuesday morning in New York after briefly breaking through $50,000. Ether (ETH), on the other hand, was up around 4% at the time of publication. Analysts suggest that bitcoin's surge past a key psychological level could indicate that recent headwinds are beginning to ease.
The latest inflation data could pose challenges for investors hoping for an interest rate cut from the Federal Reserve in the coming months. Fed Funds futures indicate a 9% likelihood of a March rate decrease, and odds of a cut in May currently sit at 37%, according to data from CME Group. The Federal Reserve Bank of New York maintained its predictions for one-year and five-year inflation on Monday, as per its January Survey of Consumer Expectations (SCE). Central bankers expect one-year prices to remain elevated more than desired, at around 3%.