Key Highlights:

• Headline inflation rose by 0.4% in December, exceeding expectations, yet the year-over-year core rate saw an unexpected decline.
• As a result, investors reacted positively, leading Bitcoin's value to rise to $98,500 after the data release.

While the headline inflation statistics were disappointing, the core Consumer Price Index (CPI) revealed a beneficial decline, prompting a buying frenzy in the market. The detailed data from the Consumer Price Index illustrates a slight uptick of 0.4% in December, with the year-over-year increase standing at 2.9%, aligning with forecasts.

Core CPI, which omits food and energy costs, observed a minor increase of 0.2% in December, matching expectations, but the year-over-year rate dipped to 3.2% against a forecast of 3.3% and a previous month’s rate of 3.3%.

The price of Bitcoin (BTC) surged by around $1,500 in the immediate aftermath of the report, representing a 2% increase over the last 24 hours.

Traditional markets also reacted, with U.S. stock index futures increasing by approximately 0.5%, while bond yields and the dollar both experienced a sharp decline.

Overall, amidst a strong economy, concerns persist regarding inflation and fluctuating monetary policy expectations.

For context, Bitcoin has remained mostly under the $100,000 mark since December's comments from Federal Reserve Chair, signaling a more hawkish tone regarding interest rates.