U.S. consumer price rises accelerated to a new four-decade high of 7.5% in January, just a week after a government employment report signaled a strong jobs market and fast wage growth.

The U.S. Labor Department on Thursday reported last month’s increase in the consumer price index (CPI), the most widely followed gauge for tracking inflation, in a statement on its web site. The increase was the fastest since February 1982 and exceeded economists’ predictions of 7.3%.

The core CPI, which measures price changes excluding food and energy because they tend to be more volatile, rose to 0.6% month-over-month, the same pace as in December.

Bitcoin (BTC), which some crypto investors believe to be a hedge against inflation because its supply is limited, was down 1.9% in the minutes after the report was released by the Labor Department’s Bureau of Labor Statistics (BLS) on Thursday. The 10-year U.S. Treasury yield peaked over 2% for the first time since 2019.

The biggest driver for overall inflation continued to be used-car prices, with an increase of 40.5% in January from a year ago and 1.5% higher than in December. Food prices surged 0.9% month-over-month, adding up to a 7% increase year-over-year, the highest since 1981. Energy costs advanced 0.9% in January.

With inflation hitting a new high and the labor market hot, many analysts expect the Federal Reserve to be even more aggressive in raising interest rates than previously forecasted. The Fed kept interest rates near zero after the latest Federal Open Market Committee (FOMC) meeting in January, but hinted at rate hikes starting in March.

“With inflation well above 2% and a strong labor market, the Committee expects it will soon be appropriate to raise the target range for the federal funds rate,” the Fed said in a statement after the meeting.

The cryptocurrency market has seen a sharp drawdown after a period of all-time highs in November, but it has recovered to some extent over the last couple of weeks, which could be a result of the Fed’s hawkishness as inflation has picked up.

“Inflation still has less influence on bitcoin’s price than other speculative factors,” said Scott Bauer, a former Goldman Sachs trader who’s now CEO of Prosper Trading Academy. “The idea that bitcoin is an inflation hedge has really not been proven yet, it’s still somewhat theoretical.”

However, the recent price movements in the crypto market have partly been caused by economic factors such as inflation and the likelihood of higher interest rates, according to Bauer.

“The Fed is not going to be as aggressive as some are saying that they will. I don’t think we’re going to get seven or eight rate hikes. I don’t think we’re going to get a 50 basis point hike in March,” he said.

Regarding a price prediction for bitcoin this year, he can see it go anywhere from $30,000 to $50,000, depending on the overall equity market and decisions made by the Federal Reserve.

“If I had to put odds on one of the two, I’d say it’s at 80/20 to the upside rather than the downside,” he said.

UPDATE (Feb. 10, 2022, 14:19 UTC): Adds 10-year U.S. Treasury yield price.

UPDATE (Feb. 10, 2022, 14:35 UTC): Adds more information on specific price increases.

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