US CPI: Inflation Picks Up Pace to Worrying 3.0% in January. Stocks, Bitcoin Tumble

Consumer prices hit 3% growth last month, sending shockwaves across asset classes and markets.

💸 Price Growth Hits 7-Month High

• US inflation ticked up more than expected to 3.0% in January, the latest consumer price index report USCPI showed. Analysts had expected prices to grow at the same pace they did in December — 2.9%. But instead, consumer prices got back to where they were seven months ago and that spooked risk investors, leading to a selloff in stocks and Bitcoin.
• The figure only strengthened the case for the Federal Reserve to take it easy with the interest rate cuts. Fed’s Powell is testifying at Capitol Hill later today while Fed officials won’t meet until March 18-19.

👀 Trump Asks for Lower Rates

• Just before the inflation data was released, President Trump took to social media to demand a cut to borrowing costs so that they could go hand in hand with the imposed tariffs. Speaking of tariffs, many analysts are fearful that the tariff hikes could result in even more inflation down the road.
• The Fed already lowered borrowing costs three times last year and only recently hit the pause button for more cuts. “We don’t see any reason to be in a hurry to reduce further,” Jay Powell said yesterday.

🚨 Stocks, Bitcoin Tumble

• First reaction immediately after the data dump: Dow Jones slipped more than 300 points as antsy investors rushed to offload their risk right at the opening bell on Wednesday. Bitcoin, the epitome of risk, notched a drop of about 2% diving under $94,000 per token.