Silver prices surged to a new all-time high following the release of cooler-than-expected US core inflation data, highlighting renewed investor interest in hard assets amid shifting macroeconomic expectations. At the same time, Bitcoin posted a modest reaction, reflecting growing skepticism about the long-term influence of macro data on crypto price action.
The latest data from the US Bureau of Labor Statistics (BLS) showed that while headline inflation remained elevated, underlying inflation pressures appear to be easing—an outcome that markets have been closely watching.
US Inflation Rises 2.7% in December, Core CPI Comes in Below Expectations
According to the December Consumer Price Index (CPI) report, headline inflation rose at an annual rate of 2.7%, in line with market expectations. However, the more closely watched core CPI, which excludes food and energy prices and serves as the Federal Reserve’s preferred inflation gauge, increased by 2.6%, slightly below consensus estimates.
This softer core inflation reading suggested that underlying price pressures may be moderating, reducing fears that the Federal Reserve will need to resume aggressive monetary tightening.
Markets reacted swiftly but selectively. Bitcoin briefly climbed above $92,000, posting a mild rebound, while spot silver prices surged past $87 per ounce for the first time, extending gains to more than 21% year-to-date.
Softer Inflation Boosts Silver as a Hedge Asset
Silver’s rally was widely anticipated by market participants who view the metal as both an inflation hedge and a beneficiary of easing financial conditions. Lower core inflation reduces pressure on real yields, which tends to improve the appeal of precious metals.
At the same time, expectations of a pause in rate hikes have increased liquidity optimism, further supporting silver’s move higher. These dynamics appear to have driven a coordinated uptick across select risk and hedge assets, even as broader markets remained cautious.
Fed Rate Expectations Remain Largely Unchanged
Despite the favorable inflation signal, interest rate expectations showed little change. Prior to the CPI release, the CME FedWatch Tool indicated a 95% probability that the Federal Reserve would keep interest rates unchanged in the 3.50%–3.75% range. Following the data, those probabilities remained virtually the same.
The CPI report may still influence discussions ahead of the Federal Reserve’s January 28, 2026 policy meeting, but markets appear confident that the Fed is unlikely to shift its stance abruptly.
Commenting on the data, monetary economist Judy Shelton questioned earlier concerns about inflationary pressures from tariffs:
“I think this shows how wrong Chairman Powell was… when he said tariff-induced inflation was going to be the Fed’s big worry. It turns out we don’t have that, and the tariffs, meanwhile, have improved our fiscal situation.”
Crypto Market Volatility Continues to Decline
Ahead of the CPI release, analysts at Greeks.live noted a sharp decline in crypto’s implied volatility (IV) compared to levels seen a week earlier. This trend suggests that traders increasingly believe macroeconomic data releases no longer have the same influence on crypto markets as in previous cycles.
While Bitcoin experienced a brief uptick after the CPI data, the reaction was relatively muted compared to historical macro-driven moves. Analysts pointed out that the early-month rebound, which had temporarily improved market skew, has already faded, with skew returning to holiday-period levels.
“Market sentiment remains relatively weak, with bullish momentum being quite fragile. The slightest hint of trouble causes investors to flee,” Greeks.live analysts wrote.
Growing Disconnect Between Macro Data and Market Behavior?
The restrained reaction across crypto markets aligns with broader concerns raised by traditional finance leaders. JPMorgan Chase CEO Jamie Dimon recently warned that markets may be underestimating both macroeconomic risks and geopolitical uncertainty.
Together, these observations suggest that while macro data still matter, their marginal impact on short-term crypto price action may be diminishing, as markets increasingly focus on liquidity conditions, positioning, and internal market structure.
Final Thoughts
Silver’s breakout to a new all-time high underscores how traditional hedge assets continue to respond strongly to shifts in inflation expectations. Meanwhile, Bitcoin’s muted response highlights an evolving dynamic in crypto markets, where macro signals may no longer be the dominant driver they once were.
As 2026 approaches, investors across both traditional and digital asset markets appear to be navigating a more complex environment—one shaped by easing inflation, cautious monetary policy, and fragile market sentiment.
Disclaimer:
This article is for informational purposes only and represents a personal market commentary. It does not constitute financial or investment advice. Readers should conduct their own research before making any investment decisions. The author assumes no responsibility for any investment outcomes.
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