Bitcoin rises above $85,000 after inflation comes in below estimates

Bitcoin rose after data released Wednesday showed U.S. inflation increased more slowly than expected. Bitcoin reached $85,518 on Wednesday morning in New York before standing at $84,246. The Federal Reserve's main inflation gauge, the personal consumption expenditures price index, rose 3.4% on a headline basis in August, below estimates. The index rose 3% on a core basis in August, also below estimates. The inflation figures make the Federal Reserve less likely to raise interest rates in October. High inflation has prompted the central bank to take a more hawkish approach to monetary policy. In his first speech since becoming Federal Reserve chair, Kevin Warsh said in August that the bank had "more work to do" to fight inflation. The Federal Reserve raised interest rates in September. Warsh said at the time that inflation was too high and had been for too long. Bitcoin appeared to shrug off the increase and performed well in the following week. Bitcoin reached $87,158 earlier this month. Some analysts said investors did not expect the Federal Reserve to start raising rates successively. Bitcoin has rallied since the U.S. Treasury announced plans to more than double the size of its government debt repurchases. Bitcoin and other risk-on assets have performed well in low-interest-rate environments in the past. U.S. President Donald Trump has repeatedly pressured the Federal Reserve to lower interest rates. Last year, Trump threatened to fire former Federal Reserve chair Jerome Powell and said Powell did a "bad job" by not lowering interest rates.