Bitcoin rises 6% amid easing US inflation, yet CPI data remains incomplete following the shutdown.

At 8:30 a.m. in New York, attention turned to the January U.S. inflation figures, which were released with a muted impact.

The headline CPI registered at +2.4% year over year, slightly below the +2.5% forecast that had circulated prior to the announcement. Core inflation, which excludes food and energy prices, increased by 2.5% year over year, aligning with expectations.

For the month, prices continued to rise at a familiar rate. Headline inflation increased by 0.2% in January, while core inflation rose by 0.3%, seasonally adjusted. This indicates stability, yet reveals significant details regarding the sources of pressure.

Shelter costs rose by 0.2% for the month, with the BLS identifying it as the primary contributor to the overall increase. Energy prices decreased by 1.5% in January, and gasoline prices fell by 3.2% on a seasonally adjusted basis. Airline fares surged by 6.5% for the month, used cars and trucks saw a decline of 1.8%, and motor vehicle insurance decreased by 0.4%.

Over the year, the overall trend remained consistent. The all-items index increased by 2.4% over the 12 months ending in January, down from 2.7% in December, while core inflation remained steady at 2.5% year over year. Shelter costs rose by 3.0% annually, food prices increased by 2.9%, and energy prices fell by 0.1%.

There exists a subtle complication within the official data.

The BLS indicated that CPI data for October and November 2025 is currently unavailable due to a lapse in appropriations, and the Cleveland Fed’s nowcasting page emphasizes the absence of the October 2025 CPI release, which was postponed due to last year’s government shutdown. When records are incomplete, models and proxies become more significant, and confidence in the data is affected.

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Subsequently, the figures leave the government platform and enter the market. Short-term interest rates begin to adjust, and the broader risk landscape responds.

A straightforward indicator is the 2-year Treasury yield. The latest data from Feb. 11 indicated a yield of approximately 3.52%, up from 3.45% the previous day, according to FRED. This yield directly competes with risk appetite, establishing a baseline return for minimal risk, and influences the perceived cost of pursuing higher returns.

The cryptocurrency market quickly feels this shift, and the underlying mechanisms clarify the reason. DefiLlama’s tracker estimates the total stablecoin market capitalization at around $307 billion, representing a pool of cash-like liquidity that traders utilize to transition into more volatile assets.

When this pool expands, it often indicates a market seeking optionality, while a stagnation typically reflects a market prioritizing yield and certainty.

Bitcoin responded to some of that stablecoin liquidity by rising 6% intraday, approaching the $70,000 mark once again. However, after several unsuccessful attempts to surpass $71,500, there remains uncertainty regarding its capacity to maintain upward momentum beyond a temporary relief rally.

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The Fed maintains its position, and the vote reveals where the pressure lies

The Federal Reserve has been consistent in its messaging, and the January meeting upheld that tone. In its Jan. 28 statement, the FOMC maintained the federal funds rate target range at 3.5% to 3.75% and noted that inflation “remains somewhat elevated.”

The voting process behind this decision is noteworthy.

Two officials, Stephen I. Miran and Christopher J. Waller, expressed dissent and favored a quarter-point reduction at that meeting, according to the record attributed to Miran. This provides insight into the internal dynamics and allows markets to continue questioning the timing of future decisions.

The calendar now tightens the narrative. The next significant milestone is the March 17–18 meeting, with the statement and press conference scheduled for March 18. This meeting occurs after the next CPI report and in a year where policymakers have already outlined a trajectory suggesting lower rates over time.

This trajectory is reflected in the Fed’s projections. The Summary of Economic Projections indicated a median expectation for the fed funds rate at 3.4% by the end of 2026 and a median core PCE inflation of 2.5% in 2026. In simpler terms, officials anticipate rates to gradually decline as inflation eases, while the range of potential outcomes remains broad enough to keep every data point significant.

This is why a 2.4% headline CPI figure is important. It reinforces the notion that inflation is moving closer to the target range, and it keeps the market focused on the timing of when the Fed might transition from holding to easing.

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The next print is already anticipated

Markets seldom wait for the subsequent release; they begin to price it in as soon as the previous one is published. This is where nowcasts become relevant, particularly with the data gap looming.

The Cleveland Fed’s nowcast, updated on Feb. 12, projected February 2026 CPI at 2.36% year over year and core CPI at 2.42% year over year, with month-over-month estimates of 0.22% for headline and 0.20% for core. These are model-based estimates that shape real-time expectations and influence positioning.

The official date for the next release is also confirmed. The BLS schedule indicates that the February CPI report will be available on Wednesday, March 11, at 8:30 a.m. ET, and that single morning will set the tone leading into the March Fed meeting. Traders will highlight that date prominently, as will anyone attempting to predict how quickly rates may ease.

In the interim, the narrative remains anchored in the same everyday categories. Energy prices can decrease rapidly, gasoline can drop within a week, airline fares can fluctuate, and shelter costs tend to move more gradually. In this report, shelter costs still increased for the month, and they rose by 3.0% over the year, as detailed in the January Shelter report.

This illustrates why the personal experience of inflation often lags behind the headline figures. Rent and housing-related expenses tend to persist, even when the overall number appears more stable.

Looking at the broader context, the global environment influences the longevity of this narrative

U.S. inflation data may seem localized, yet it has global implications. Capital flows across borders more swiftly than most narratives can adapt, and a softer inflation trend in the U.S. alters the global risk landscape.

The IMF forecasts global growth at 3.3% in 2026 and 3.2% in 2027, expecting global inflation to decline while U.S. inflation gradually returns to target. This establishes a baseline where the world continues to progress, and central banks remain vigilant for signs of price increases.

The OECD expresses a similar outlook, predicting a decrease in global GDP growth from 3.2% in 2025 to 2.9% in 2026, while also noting that elevated valuations and the rapid expansion of the crypto-asset market capitalization warrant attention from a financial stability perspective. When the macroeconomic backdrop exhibits both resilience and risk, speculative markets tend to fluctuate in cycles, and each CPI release serves as a metric for assessing which cycle is emerging.

Three potential paths forward, and the ongoing relevance of crypto

This straightforward framework helps maintain focus amid the constant influx of new data.

1. The first scenario involves steady cooling. Headline inflation gradually approaches the low twos, core inflation follows suit, shelter costs continue to decline, and the Cleveland Fed’s nowcast aligns with this trend today. In this scenario, rate cuts become more justifiable later in the year, financial conditions ease, and crypto typically benefits from the shift in sentiment from caution to investment.
2. The second scenario features persistent inflation. Service categories continue to show strong month-to-month figures, shelter costs remain stable, energy prices cease to provide relief, and the Fed adopts a cautious stance, as reflected in the January rate decision. In this case, yields remain competitive, liquidity becomes selective, and crypto may still experience rallies, albeit with sharper pullbacks when the opportunity cost of holding risk rises.
3. The third scenario presents a growth wobble. Inflation decreases, the real economy slows, and policy easing occurs sooner, leading to a more volatile risk appetite. The global outlook according to the IMF allows for both resilience and shocks, with that uncertainty becoming a factor in trading decisions.

In all three scenarios, stablecoins serve as a straightforward indicator of crypto liquidity. A base of approximately $307 billion represents substantial buying power, as well as a significant amount of capital that can remain in cash-like forms when yields appear attractive.

The human perspective

A 2.4% CPI figure may seem straightforward, yet it serves dual purposes. It soothes the macroeconomic sentiment while leaving many individuals still grappling with the challenges posed by shelter and other persistent costs.

Most individuals perceive inflation through the categories they encounter daily. Housing costs creep upward, food prices remain high, insurance feels personal, travel costs fluctuate, and those sudden price increases impact essential aspects of life.

Cryptocurrency operates within that same reality, responding to the sentiment surrounding rates and liquidity with heightened sensitivity. As inflation decreases, discussions regarding rate cuts intensify, the front end of the yield curve reacts, and the cash pool within crypto, represented by stablecoins, becomes more inclined to take on risk.

Upcoming dates are approaching quickly.

March 11 marks the next CPI release, while March 17–18 is reserved for the next Fed meeting, with the schedule centered on the Fed and March timelines.

In the meantime, the market will continue to observe shelter costs, yields, and stablecoins, determining what kind of year these figures will ultimately represent.

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