Bitcoin surged past $95,000 on Jan. 13 after U.S. inflation data showed the Consumer Price Index holding at 2.7% annually, reinforcing expectations that the Federal Reserve could pivot toward interest rate cuts later in 2026 while President Donald Trump publicly urged Jerome Powell to lower rates "meaningfully."
What Happened: CPI Data Sparks Rally
The Bureau of Labor Statistics reported that CPI rose 0.3% in December, with annual inflation holding steady at 2.7%. Core CPI, which excludes food and energy, increased 0.2% for the month and 2.6% year-over-year.
Bitcoin climbed to $95,222 at press time.
The broader crypto market capitalization rose to approximately $3.12 trillion, adding roughly $27 billion in value.
Trump responded on Truth Social shortly after the release, writing: "Great (LOW!) Inflation numbers for the USA. That means that Jerome 'Too Late' Powell should cut interest rates, MEANINGFULLY!!!"
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Why It Matters: Policy Expectations Shift
The data suggests price pressures have stabilized near the Fed's long-term target, creating conditions that could allow policymakers to ease monetary policy if economic growth slows.
Shelter costs remained the largest contributor to monthly inflation, rising 0.4% in December and 3.2% year-over-year.
Services inflation continued to outpace goods, reflecting persistent wage and rent pressures.
As institutional participation has expanded through ETFs and derivatives, Bitcoin has grown increasingly sensitive to U.S. inflation readings; stable inflation near the Fed's target typically allows bond yields to ease and risk assets to attract capital.
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