The much-awaited US Consumer Price Index statistics are finally released for the month of June 2022. As per the data, The CPI is reported to be at 9.1%. This marks one of the highest inflation rates in the last 40 years of US history.
As the figure goes above the expected percentage, this could see increased selling pressure on all of the risked assets which also includes Bitcoin. Following the news, Bitcoin dropped by 4% and Ethereum by 5%. Also, the inflation figure impacted the NASDAQ, Dow Jones, and S&P 500.
Consumer Price Index (CPI) is the one that measures the US cost of living. If the core inflation is considered, it is expected to be either 0.6% month-on-month or 5.8% for the year.
At the start of this week, the White House said that inflation is an outdated figure inclined to increased energy and food prices in the last two weeks.
If the core CPI turns out to be higher than expected, then it will confirm that the Federal Reserves will have an aggressive approach toward rate hikes. This move will push the dollar to rally and increase the selling pressure for all the risky assets out there, including Bitcoin.
Increase Of 75 Basis Points In July?
As per the Fed fund futures, there could be an increase of 75 basis points later in this month of July. Meanwhile, traders expect an increase of 50 basis points in September followed by a 25 basis point surge in November and December. Also, the Central bank has increased by 150 basis points to the range of 1.5% to 1.75% from March.
At the moment, in order to manage the adverse effects of the rate hike on business growth, currency speculators are already valuing a softening of fiscal strategy in the second quarter of 2023.
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Source: https://coinpedia.org/news/heres-how-crypto-marketing-is-reacting-to-the-cpi-reports-with-9-1-inflation-rate/