The prices of top cryptocurrencies went up after the US Labor Department published its Consumer Price Index (CPI) report for December, standing at 7% – the highest since June 1982.
The US core CPI was 5.5% in December, the highest since February 1991.
The widely followed CPI, therefore, showed an acceleration in inflation that could spur the Federal Reserve to tighten monetary policy aggressively over the next few months.
The Consumer Price Index (CPI) for all items in the United States saw an annual increase of 7.0% in December, observing a rise in comparison to 6.8% recorded in November.
Bitcoin prices quadrupled in 2020 and rose by approximately 60% last year when traders said the Fed’s loose monetary policies could ultimately lead to a fast climb in consumer prices.
The highest inflation in almost 40 years comes one day after Federal Reserve Chair Jerome Powell testified before Congress that the central bank would clamp down on stimulus measures to prevent higher inflation from becoming entrenched, saying “if we have to raise interest rates, we will”.
Bitcoin went from roughly $43,000 shortly before the report was released at 8:30 AM EST, to reach $44k within 30 minutes.
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