U.S. PPI Inflation Rises To 2.9%, BTC Price Falls

The U.S. PPI inflation has come in way above expectations, signaling that inflation may be on the rise. The BTC price quickly dropped below $66,000 on the back of the data release, as the Fed is likely to keep holding rates steady, with inflation still a growing concern.

PPI Inflation Comes In Hot At 2.9%, BTC Price Drops

Bureau of Labor Statistics data show that the Producer Price Index rose 2.9% year-over-year (YoY) in January, above expectations of 2.6% but below the 3% figure recorded in December 2025. PPI rose to 0.5% month-over-month (MoM), above expectations of 0.3%.

Furthermore, core PPI  inflation rose to 3.6% YoY, above expectations of 3% and o.8% MoM, above expectations of 0.5%. This represents an increase from the December 2025 PPI inflation report, when the core PPI came in at 3.3%. This is also the highest level since July 2025.

The BTC price fell following the data release, dropping below $66,000, according to TradingView data. The leading crypto is trading at this psychological level at the time of writing, but is still at risk of a further decline.

With PPI inflation data coming in above expectations, the Fed is more likely to keep rates steady, especially with Fed officials raising concerns that inflation is well above their 2% target. CME FedWatch data shows that there is currently a 96% that the Fed will hold rates steady at the March FOMC meeting rather than making another rate cut.

The FOMC minutes also signaled that the Fed may be open to hiking rates if inflation remains above their 2% target. Notably, the PCE inflation, which dropped last week, also came in hot, rising to 2.9% in January, above expectations of 2.8%. The PCE is the Fed’s favorite inflation gauge and would largely impact upcoming rate decisions if inflation remains elevated.

Fed No Longer Expected To Cut Rates In June

Polymarket data shows that the Fed is now unlikely to cut rates at the June FOMC meeting, with only a 46% chance of that happening. The odds have dropped from as 70% recorded earlier in the year, with macro data like the PPI inflation contributing to this development.

Notably, the June FOMC meeting will be the first meeting for the incoming Fed chair, with current chair Jerome Powell’s term ending in May. U.S. President Donald Trump had stated that he expects the incoming Fed chair to lower rates immediately. Trump has already nominated former Fed Governor Kevin Warsh to succeed Powell.

According to Polymarket data, the first rate cut could come in July, with a 62% chance of that happening. However, these odds could still drop if inflation does not trend downwards by then and the labor market continues to stabilize.