Bitcoin jumped after US inflation data signalled that consumer prices are rising more slowly than feared, making investors optimistic about the health of the world’s largest economy.
The core consumer price index fell to 0.2% compared with last month, versus a consensus estimate of 0.3%. Compared with last year, inflation fell to 3.4%. Analysts expected a 3.5% gain.
“This is stellar data, unequivocally confirming that disinflation is still intact,” Caleb Franzen, founder of Cubic Analytics, said in a note.
Bitcoin gained 2.3% in the last hour. Futures tracking the S&P 500 rose, while US government bond yields fell.
Federal Reserve Chair Jerome Powell will speak later today on his outlook for US monetary policy.
Slower than expected inflation “could see Powell take a more dovish tilt,” Markets.com chief analyst Neil Wilson said before the numbers hit at 8:30 am in Washington today.
“They are seeking to trim some level of restriction from monetary policy, with the eco data pointing towards a slowdown and unemployment rising,” Wilson said. “That tends to suggest a cut in September and one more this year.”
An interest rate cut tends to lift risk-on assets, including stocks and crypto.
Crypto market movers
Bitcoin gained 3.3% over the past 24 hours to $69,334.
Ethereum increased 2.6% to $3,627.
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