Inflation in the United States showed signs of moderation in February, with consumer prices rising 0.2 percent compared to January, according to the Consumer Price Index (CPI) data released on Wednesday. On an annual basis, inflation fell to 2.8 percent, down from 3 percent the previous month. Following the release of the report, Bitcoin reacted positively, climbing above $84,000.

Fed Outlook and Tariff Effects

Despite the slowdown in inflation, economists warn that President Donald Trump’s tariff policies could put upward pressure on prices in the coming months. Core CPI, which excludes food and energy costs, also rose 0.2 percent for the month, bringing annual core inflation to 3.1 percent, down from 3.3 percent in January.

Markets are now focusing on the upcoming Federal Reserve meeting, where the central bank is expected to keep interest rates unchanged. According to the CME Group’s FedWatch tool, traders see a rate cut at next week’s meeting as unlikely.

Federal Reserve Chairman Jerome Powell has recently expressed concerns that tariffs imposed and planned by Trump could complicate inflation control. Powell warned that the effects of tariffs might act as a “sledgehammer” on inflation, making it more difficult to manage and adding uncertainty to the economic outlook. Inflation remains above the Fed’s target, keeping policymakers cautious about adjusting interest rates, which are currently between 4.25 and 4.5 percent.

Bitcoin Gains Amid Economic Uncertainty

The Federal Reserve’s strict monetary policy remains in place until inflation moves closer to the central bank’s target, keeping financial markets on edge. As uncertainty persists, Bitcoin has shown increased volatility, reacting sharply to economic data and speculation on future rate adjustments.

Before the CPI report was published, Bitcoin was trading above $83,000, having recovered from a dip below $80,000. In the last 24 hours, it has risen by 1.5 percent, according to data from CoinGecko.