Cryptocurrencies bounced today after a softer-than-expected inflation report helped much of the market rise following a challenging week. The price of the meme token Dogecoin (DOGE +1.02%) traded over 5% higher, as of 11:57 a.m. ET today.
Tame inflation report lifts the market
All eyes were on the January Consumer Price Index (CPI) report this morning, which tracks price movements across a basket of consumer goods and services and is viewed as a key gauge of inflation.
Image source: Getty Images.
The CPI came in 2.4% higher year over year. From the prior month, the CPI rose 0.2% on a seasonally adjusted basis, while core CPI excluding food and energy prices rose 0.3% from the prior month. Economist estimates had called for a 2.5% year-over-year increase, and for the monthly and core monthly numbers to each rise by 0.3%.
The report indicates that inflation may be cooling and finally heading back to the Federal Reserve's 2% preferred target. It could also indicate that an expected one-time surge in inflation from President Donald Trump's tariffs may now be in the rear view. Still, economists and strategists suspect the data might not be entirely accurate and could still be affected by the prolonged government shutdown last year, which led to two absent CPI reports.
CRYPTO: DOGE
Key Data Points
Dogecoin and the rest of the crypto sector are likely benefiting because the quicker inflation comes down, the more likely the Fed is to continue cutting interest rates, which tends to be a positive catalyst for crypto prices.
Should you buy Dogecoin?
Dogecoin continues to largely move in lockstep with the crypto sector, at least on a daily basis, which is common among most cryptocurrencies. I would still avoid buying the token because its blockchain network lacks real-world utility.
