W07 cpi miss opens door to fed pivot
January CPI surprised to the downside at 3.0% headline and 3.5% core—both below consensus. Bitcoin surged from 75,700 within 90 minutes of the print, with $340M in shorts liquidated across exchanges. Source: BLS CPI Release
see also: W06 btc consolidates near 72k · W08 btc breaks 76k on etf record inflows · W09 liquidity conditions tightened
scene cut
The CPI miss broke the Fed’s hawkish narrative, sending rate cut odds from 45% to 62% for June—and Bitcoin responded by building the base that would break the following week.
signal braid
- Dollar fell 1.4% on DXY and Treasury yields dropped 12bps as markets priced earlier Fed cuts
- Bitcoin ETF inflows stabilized at 12M
- Arbitrum processed 8.2M transactions—a new record—while Base crossed $8B TVL as L2 migration accelerated
my take
I think this was the week’s pivotal catalyst. The inflation breakdown showed shelter finally breaking below 5%, which is the Fed’s biggest pain point. The door is open for a pivot, and I expect the market to price this aggressively going forward.
ending questions
Does the Fed acknowledge the inflation progress in upcoming speeches, or do they maintain hawkish guidance until PCE confirms?
Sources: BLS, The Block, CoinDesk