Bitcoin’s price rose — albeit slightly — on data Wednesday showing that inflation had risen slower than expected.
The Fed’s main inflation gauge, the personal consumption expenditures price index, increased in August by 3.4% on headline and 3% for core — both well below estimates.
Bitcoin’s price recently stood at $84,246 after jumping as high as $85,518 at one point Wednesday morning in New York.
The news means the Federal Reserve is less likely to hike interest rates in October. High inflation is causing the U.S. central bank to take a more hawkish approach to managing monetary policy.
In his first speech since he became Fed chair, Kevin Warsh in August said the U.S. central bank had “more work to do” to fight inflation.
Then, in September, the bank raised interest rates. “The plain fact is that inflation is too high, and has been for too long,” Warsh said at the time.
Still, bitcoin’s price appeared to shrug off the move and had a good run in the week following the central bank’s move.
The coin surged as high as $87,158 earlier this month. Some analysts have said that investors are shrugging off the move as they don’t expect the Fed to change policy and start hiking rates successively.
Bitcoin has rallied since the U.S. Treasury announced plans to more than double the size of its government debt repurchases.
Bitcoin’s price has in the past performed well in a low interest rate environment, along with other “risk-on” assets.
U.S. President Donald Trump has repeatedly put pressure on the Federal Reserve to lower interest rates.
Last year, Trump threatened to fire ex-Fed Chair Jerome Powell and said he did a “bad job” for not lowering interest rates.