US Inflation Data Pushes Bitcoin into the Spotlight

December 11 brought news from the US Bureau of Labor Statistics: November’s CPI rose to 2.7%, a 0.1% increase over October’s figure. The data met expectations, and Bitcoin reflected the sentiment with its response.  

BTC’s Price Spike Post-CPI Announcement Source: WhiteBIT

Bitcoin quickly rebounded from $98,500 to over $100,000 within hours following the release of US inflation figures. Tether’s issuance of an additional $1 billion USDT on the same day may point to increased demand for crypto assets.  

This surge came just days after November’s unemployment figures were disclosed. On December 6, the US Bureau of Labor Statistics announced a 0.1% rise in unemployment to 4.2%, alongside a stronger-than-expected non-farm payroll gain of 227,000 versus the forecasted 202,000.  

The labor market plays a pivotal role in shaping Federal Reserve policy, alongside inflation figures. As the December 18 Fed meeting approaches, speculation around the interest rate decision intensifies.  

Current data from the CME FedWatch Tool shows a 96% probability that the target rate may be reduced by 25 basis points, landing between 4.25% and 4.5%.  

CME Group Fed Rate Projections for December 18 Source: CME Group

However, market conditions remain fluid, and any forecast could shift before the meeting. As always, the Fed’s decision is awaited with bated breath.