- With inflation falling across the board, the Federal Reserve might announce a rate drop.
- The annual CPI inflation rate in the US has decreased to 2.9% from 3% in June.
As inflation in the US consumer price index (CPI) fell to 2.9%, according to the US Bureau of Labor Statistics, the price of bitcoin gained speed and began to rise. However, the brief rally was short lived as the price came down to $59k mark at the time of writing.
U.S Federal Reserve monetary policy easing will follow PPI inflation falling more than predicted and a weakening consumer price index report. Wednesday saw little change in the US stock market as investors continued to search for signs of modest price hikes. Optimistic buy-the-dip recommendations caused cryptocurrency traders to become positive even before the CPI data, as they were already anticipating the Fed’s rate reduction beginning in September.
Based on statistics from the US Bureau of Labor Statistics, the annual CPI inflation rate in the US has decreased to 2.9% from 3% in June. Inflation rose to 0.2% from 0.1% in June, marking a return to monthly growth.
Interest Rate Drop Likely
The US core consumer price index dipped below 3% last month and 3.2% this month, marking the fourth straight month of decline. Since March of 2021, this reading has not been this low. Also going up from 0.1% to 0.2% was the monthly core inflation rate. But it’s less than the 0.3% from last month.
With inflation falling across the board, the Federal Reserve might announce a rate drop. Before reiterating its position on rate reduction, the central bank will continue to await forthcoming statistics on employment and PCE inflation. The market is predicting that the Federal Reserve will drop interest rates more significantly in September. According to the CME FedWatch tool, a rate drop of 50 basis points is likely to occur in September.
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