Bitcoin Surges Above $92,800 Amid CPI Clarity and Federal Reserve Coin Cost Controversy

Bitcoin briefly ascended to $92,800 this week as U.S. inflation data met expectations, but the rally reflects deeper market concerns about the Federal Reserve’s political crisis. The consumer price index rose 2.7% year over year in December, matching economist forecasts and clearing the data fog that had clouded late-2025 trading activity. Yet beyond the economic fundamentals, traders are increasingly pricing in geopolitical risk tied to a Federal Reserve coin cost controversy that has intensified scrutiny on central bank independence.

Inflation Report Supports Fed Rate-Cut Thesis

The December CPI report delivered reassurance on the inflation front. The headline figure came in flat month over month at 0.3%, while core CPI—which excludes food and energy—rose just 0.2% month over month, below the initially feared 0.3% increase. Year-over-year core inflation stands at 2.6%, beating economist expectations of 2.7%. According to the Bureau of Labor Statistics, these softer readings bolster the case for further Federal Reserve rate cuts, with interest-rate futures now pricing a 95% probability that the central bank will hold rates steady at its January meeting.

Matt Mena, Crypto Research Strategist at 21shares, noted the significance: “The cooling core data, paired with strong jobs data, remain in line with the Fed’s dual mandate and increase chances of further cuts this year even amidst the political noise surrounding the DOJ’s investigation into Chair Powell.”

Bitcoin initially responded by climbing above $92,000 as markets absorbed the benign inflation signal. U.S. stock index futures rose a modest 0.3%, while the 10-year Treasury yield fell to 4.175%, suggesting that markets welcomed the data but remained cautious about broader policy risks.

Federal Reserve Coin Cost Dispute Stokes Geopolitical Concerns

The rally took on new urgency following headlines about Federal Reserve Chair Jerome Powell’s clash with the Department of Justice. Powell released a video statement revealing that the DOJ has threatened criminal charges linked to his June 2025 congressional testimony. The dispute centers on a Federal Reserve office building renovation project whose coin cost exceeded $2.5 billion—a figure that has become the focal point of a politically charged investigation.

Powell stated: “The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public.” He characterized the DOJ probe as retaliation for the Fed’s independent monetary policy stance, asserting that the central bank’s decisions reflect economic conditions, not political pressure.

The incident highlights the tension between presidential criticism of Fed policy and institutional independence. While the White House has denied direct involvement, President Donald Trump’s sustained criticism of monetary tightening has created an atmosphere of political uncertainty. For markets, this development triggered what participants call a “safe-haven” rotation: gold climbed 1.3% alongside Bitcoin, as investors sought protective assets amid heightened geopolitical tensions.

Bitcoin Reprices as Macro Hedge

Bitcoin’s response to these developments signals a fundamental shift in how traders perceive the cryptocurrency. Beyond price swings, Bitcoin is increasingly functioning as a defensive macro hedge. According to Mena: “In a world of weaponized energy and heightened geopolitical tensions, Bitcoin is being repriced as an international reserve that remains indifferent to sovereign border disputes.”

This perspective gained traction as the coin remained volatile within a $88,000 to $94,000 range throughout January. Bitcoin pulled back sharply from its October 2025 record high of $126,000, but the cryptocurrency has found technical support in the lower $90,000s as macro uncertainty persists. At the time of this writing, Bitcoin was trading near $88,710, with 24-hour trading volume around $969 million.

Market Outlook: Watching Key Levels

Goldman Sachs recently reset expectations for Federal Reserve rate cuts to June and September 2026, pushing back prior forecasts of March and June. This pullback in cut expectations, combined with the political uncertainty surrounding the Federal Reserve coin cost investigation, creates a conflicted backdrop for Bitcoin trading.

Analysts pointed to two critical price levels to watch: support near $87,000 and resistance around $94,000. Near-term price action is likely to remain choppy as market participants weigh three competing forces: softer inflation data favoring eventual rate cuts, political risks to Federal Reserve independence, and ongoing geopolitical tensions that could drive safe-haven demand.

The cryptocurrency’s ability to hold above $88,000 while maintaining the macro hedge narrative suggests that investors view Bitcoin’s defensive characteristics as increasingly valuable in an era of policy uncertainty and institutional stress.