{"id":517721,"date":"2026-01-31T14:27:14","date_gmt":"2026-01-31T14:27:14","guid":{"rendered":"https:\/\/cryptoslate.com\/?p=517721"},"modified":"2026-01-31T15:01:35","modified_gmt":"2026-01-31T15:01:35","slug":"shock-surge-in-services-inflation-destroys-hopes-for-early-rate-cuts-as-bitcoin-price-sinks","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/shock-surge-in-services-inflation-destroys-hopes-for-early-rate-cuts-as-bitcoin-price-sinks\/","title":{"rendered":"Shock surge in inflation destroys hopes for early rate cuts as Bitcoin price sinks"},"content":{"rendered":"

The December Producer Price Index didn't just beat expectations, but it also revealed a persistent problem that forces markets to rethink the entire 2026 rate path.<\/p>\n

Final demand PPI rose 0.5% month-over-month, the sharpest jump since July, driven almost entirely by a 0.7% surge in services while goods prices sat flat. The headline came in at 3.0% year over year, beating expectations of 2.7%, but core PPI rose to 3.3% from 2.9%, the highest level since July 2025.<\/p>\n

Markets sold the news immediately. Bitcoin<\/a> dipped below the $82,400 zone as it was trying to recover from an intraday low of $81,100. Meanwhile, Fed funds futures repriced to just 52 basis points of cuts for all of 2026, with the first quarter-point move now pegged for June.<\/p>\n

The dollar index is up 0.82% over the past 24 hours, and real yields on 10-year TIPS are near 1.90%.<\/p>\n

This raises the question of whether this confirms that disinflation has stalled in the exact place the Fed can't ignore: services, where pricing power is sticky, and margins are expanding rather than compressing.<\/p>\n

\"Bitcoin #1 <\/span> <\/a>
Bitcoin <\/a> BTC<\/span> <\/div> <\/div>
$80,509.95 <\/span> <\/div>
-0.28% (24h)<\/span> <\/i> 0.28%<\/span> (24h)<\/span> <\/div> <\/div> <\/div>
<\/i> <\/a> <\/div> <\/div>
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