The Consumer Price Index (CPI) rose 6.0% in the 12 months through February, the Bureau of Labor Statistics (BLS) said Tuesday

Bitcoin moved past $26,000, for the first time since last Summer, on the back of the latest Consumer price index (CPI) data that showed inflation in the U.S. is still alive.

The CPI increased 6.0 per cent in the 12 months through February, the Bureau of Labor Statistics (BLS) said Tuesday, meeting economists’ assumptions for the index, which tracks price movements across a wide range of goods and services.

Bitcoin and Ethereum climbed 5 per cent and 4 per cent to $26,295 and $1,778, respectively, as per CoinGecko. Other tokens, like Dogecoin and Solana, also increased, adding to gains from Monday.

Since setting a 41-year high of 9.1 per cent last June, inflation has shown indications of mitigating but continues to be much higher than the Federal Reserve’s target of 2 per cent.

On a month-to-month basis, prices increased 0.4 per cent in February from January, matching economists’ predictions. The biggest monthly gains to CPI came from food, recreation services, and shelter, which accounted for 70 per cent of the monthly rise to CPI.

Shelter prices increased 0.8 per cent from January to February, an 8.1 per cent rise from a year earlier. Energy prices dropped 0.6 per cent month-to-month after rising by 2 per cent in January.

Core CPI, which excludes volatile food and energy prices, came in slightly above economists’ expectations at 0.5 per cent contrary to 0.4 per cent.

To control inflation, the Fed has increased interest rates, making it more expensive for businesses and consumers to borrow, and cooling the economy. Since it raised interest rates from near zero last March, the Fed has taken interest rates to a target range of 4.50 per cent to 4.75 per cent—the highest since October 2007.

In December 2022, the Fed forecasted that interest rates would increase 5.1 per cent in 2022. And Fed Chairman Jerome Powell said earlier during the month that rates would likely have to rise, citing ‘economic data (has) come in stronger than expected’ during congressional testimony.

But that was prior to the collapse of various U.S. banks last week.

Crypto-friendly Silvergate Bank said it was voluntarily shutting down operations last Wednesday. Silicon Valley Bank (SVB) then collapsed Friday, marking the second-biggest bank failure in U.S. history. Signature bank, another crypto-friendly institution, was shut down by regulators on Sunday. The government has insisted, time and again, that depositors in SVB and Signature would be made whole.

Had the U.S. banking sector not been thrust into a state of turmoil, Tuesday’s inflation data could have possibly driven the Fed to continue hiking interest rates at their meeting next week.

But, because of the probability that SVB’s problems were a partial result of higher interest rates, the report’s sway is not as clear. U.S. Treasury Secretary Janet Yellen proposed Sunday that problems at SVB were the result of ‘a higher interest rate environment’ as against problems with the tech sector.

Yesterday, crypto currency prices increased as investors revised expectations of future rate hikes from the Fed. The probability of the Fed hiking interest rates by 50 basis points next week was wiped away as traders came to believe a halt was more likely.