Daily Update:

• Headline inflation in the US rose 3% in January, above the 2.9% figure that economists had expected. More importantly, the core metrics showed prices rising 3.3% in the 12 months ended in January, up from 3.2% in December and the 3.1% expected. Month-over-month, core prices rose 0.4%. The move was largely driven by sticky shelter inflation with owners’ equivalent rent remaining persistent at 0.3% and higher food prices (2.5% YoY — largely due to a 53% YoY growth in egg prices).
• BTC and the rest of crypto immediately felt the brunt of the action – falling 1.6% immediately following the release. However, that move was quickly reversed later on in the day.
• Similarly, the S&P 500 fell 1% following the CPI release, though pared gains back to end the day 0.3% lower. 

• Following the release, during his second day of testimony, Chair Powell said “We’ve made great progress [on inflation] but we’re not quite there yet. So we want to keep policy restrictive for now.”
• Chair Powell also highlighted that the Fed favours PCE inflation as “its simply a better measure of inflation” and that the Fed doesn’t “get excited about one or two good readings” nor does it “get excited by bad readings.”

• The UK economy grew at an annualised rate of 0.1% in Q4 of 2024, exceeding economist expectations of a -0.1% contraction. The Q4 figure also comes as a slight reprieve following the unexpected flat 0% growth between June and September. 

• Trump backed, World Liberty Financial, has introduced their Macro Strategy concept: a strategic token reserve with a diversified portfolio of investments across cryptocurrencies including Bitcoin and Ethereum as well as actively partnering with traditional financial institutions to add tokenised Real world assets (RWAs) to their reserve. Alongside that news, WLF bought an additional 1,917 ETH yesterday.
• Mercuryo announced a partnership with Revolut to launch Revolut Pay in the European Economic Area. This aims to simplify crypto purchases, enhance security (such as know your client- KYC features), and will initially offer access to various fiat currencies and 44 crypto assets.

This Week’s Calendar:

Charts Of The Day:

‍