BTC and ETH reacted positively to a lower than expected CPI print.
- The CPI print for November came in today at 7.1%.
- The print is 0.6% lower than October’s, and 0.2% lower than expected.
- The crypto market reacted positively to the news, with BTC and ETH soaring by 4.65% and 6% each before falling back slightly.
The year-to-year inflation rate came in at 7.1% today, strengthening the market’s belief that inflation may indeed have peaked and that the Federal Reserve might soften its aggressive monetary policy.
Inflation Loses Steam
It appears that inflation really is cooling off.
The Consumer Price Index (CPI) for November came in at 7.1% today, solidifying hopes that inflation may have peaked and entered a steady downtrend. The figure is 0.2% less than the 7.3% print expected by analysts for this month; it also marks a 0.6% decrease from the October CPI print, which reached 7.7%.
Markets reacted positively to the print, with BTC and ETH initially rising by 4.65% and 6% respectively on the daily—briefly touching $18,000 and $1,350—before falling back down slightly. At the time of writing, the top cryptocurrencies were each trading for $17,780 and $1,327.
The reaction from legacy markets was similar. The S&P 500 opened up by 2.60%, the Nasdaq by 3.60%, and the Dow Jones by 2%. However, they quickly gave back a portion of their gains and are currently only up 1.31%, 0.59%, and 2.43% respectively.
Signs of abating inflation are certainly welcomed by the crypto market, as they foreshadow a potential easing of the aggressive monetary policy the Federal Reserve has been pursuing throughout the year. To combat the surge in price of core consumer goods, the U.S. central bank began raising interest rates in March—first by 25 basis points, then 50 bps, and subsequently 75 bps every month, quickly bringing them from roughly 0% to approximately 4%.
Federal Reserve Chair Jerome Powell indicated in a public appearance two weeks ago that the next rate hike would possibly only be 50 bps, citing a need to “moderate the pace of… rate increases” due to the inflation cooldown and the lagging effect of rapid rate increases on the economy. However, Powell reiterated his intention to bring the inflation rate back down to 2%. The central bank will be conveying their decision with regards to the next hikes tomorrow at 14:00 EST.
Disclaimer: At the time of writing, the author of this piece owned BTC, ETH, and several other crypto assets.
The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
Bitcoin Down as Fed Hikes Rates by Another 75 Basis Points
The Fed’s funds rate is now 3.75% to 4%. Fed Hikes Rates The Federal Reserve has hiked interest rates by another 75 basis points. The U.S. central bank announced it…
UN Warns Fed to Cool Rate Hikes
A UN agency is urging the Federal Reserve to slow its increases in the federal funds rate to avoid recession. “We Must Change Course” The Federal Reserve needs to pump…
Crypto’s Volatile Week Continues as Inflation Softens to 7.7%
The Consumer Price Index declined by 40 basis points in October. Inflation Cools to 7.7% U.S. inflation has declined for the fourth consecutive month. The Bureau of Labor Statistics published…