US Inflation Rate Slows to 6.5% in December, Inline With Estimates
The consumer price index (CPI) slipped 0.1% in December, roughly inline with expectations for a flat reading. On an annualized basis, the CPI was higher by 6.5%, inline with expectations and down from 7.1% a month earlier.
The core CPI – which strips out volatile items like food and energy – was up 0.3% in December, inline with forecasts. Annualized core CPI was up 5.7%, also inline with forecasts and down from 6% in November.
Bitcoin (BTC) is has slipped about $150 on the news, with traders having bid the crypto higher in the days leading up to this morning's report in hopes inflation might decline ever more. While December marks the 6th consecutive month of inflation slowdown in the U.S. – the rate having peaked in June at 9.06% – it remains well above the U.S. Federal Reserve's 2% target.
Bitcoin string of gains early in 2023 has seen it rise from about $16,500 to begin the year to a one-month high of $18,250 earlier today. While part of the advance was likely due to nothing more than some investor bottom-fishing after the crypto's ugly 2022 run, at least some of the gains were thanks to optimism that the Fed monetary tightening cycle could come to a close at some point in early-mid 2023. Whether today's inflation report hastens that remains to be seen.