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The U.S. Bureau of Labor Statistics has released the CPI inflation report for January 2024, and the data show a higher-than-estimated inflation rate. In particular, inflation increased from the previous month.

To clarify, the Fed's target for core inflation is 2%, which means the monthly average should be around 0.17%. This target is used as a measure of control and stability of the economy.

January's monthly core CPI inflation rate was 0.4 percent, higher than expectations of 0.3 percent and the December reading of 0.3 percent. This brings annual core CPI inflation to about 4.8 percent.

Importantly, headline core CPI inflation was higher than expected, with a monthly increase of 0.3 percent and an annual rate of 3.6 percent. This indicates a general increase in the prices of goods and services.

It is crucial to note that monthly inflation must be between 0.1 percent and 0.2 percent to reach the annual target of 2 percent. Thus, the January CPI inflation data were very significant, clearly exceeding the Fed's expectations.

However, the price decline touched in June 2023 also marks the lowest point in a disinflationary process. Since then, monthly core CPI numbers have increased, and the January 2024 reading of 0.392 percent is the highest recorded since the inflationary shock began in 2023. 

Now the question is, does this reading represent the highest peak of recent inflation growth or do we still expect another rise? What does it all mean?

It means that a significant reduction in interest rates is still a long way off. This, however, could trigger a market correction, particularly for the Nasdaq and gold.

Bitcoin continues to show strong growth and seems to have become increasingly correlated with the SP500 index. Although Bitcoin tends to make more aggressive moves, the correlation between the SPX and Bitcoin is quite evident. 

The data analysis for Bitcoin is showing a sharp increase in its use on the network, which translates into steadily increasing network fees.

According to the most recent statistics, (Reuters) more than 3 percent of Bitcoin's supply is held by ETFs. This is a significant amount in a short period of time. ETFs on BTC have been well received by both institutions and the public, adding further demand just as supply approaches its near halving in the coming months.

Bitcoin's all-time high is easily within reach.

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Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.