Markets are rising as inflation slows

Important fast food

  • The November CPI release came in today at 7.1%.
  • Pressure 0.6% lower than in October and 0.2% lower than expected.
  • The cryptocurrency market reacted positively to the news, with BTC and ETH gaining 4.65% and 6% each before retreating slightly.

The year-on-year inflation rate is down to 7.1% today, reinforcing the market’s belief that inflation may have already peaked and that the Federal Reserve may ease its aggressive monetary policy.

Inflation is losing steam

Inflation already appears to be calming.

Consumer price index for November Enter at 7.1% today, boosting hopes that inflation may have peaked and entered a steady downward trend. This number is 0.2% lower than the 7.3% expected by analysts for the month. It also represented a decrease of 0.6% from October CPI Print Editionwhich amounted to 7.7%.

The markets responded positively to the pressure, with Bitcoin and Ethereum initially rising 4.65% and 6% respectively on the day – briefly at $18,000 and $1,350 – before pulling back a bit. At the time of writing, the top cryptocurrencies are trading at $17,780 and $1,327 each.

The reaction from the old markets was similar. The S&P 500 opened 2.60%, the Nasdaq 3.60% and the Dow Jones 2%. However, they quickly gave up some of their gains and are currently up 1.31%, 0.59%, and 2.43%, respectively.

The cryptocurrency market certainly welcomes signs of easing inflation, as it portends a possible easing of the aggressive monetary policy that the Federal Reserve has pursued throughout the year. To combat the rise in core consumer prices, the US Federal Reserve began raising interest rates in March – first by 25 basis points, then by 50 basis points and then by 75 basis points each month, quickly taking them from around 0% to about 4%.

Federal Reserve Chairman Jerome Powell indicated in a public appearance two weeks ago that the next rate hike would probably be only 50 basis points, citing the need to “ease the pace of… rate hikes” due to the slowdown in inflation and the slowdown. The effect of rapid increases in interest rates on the economy. But Powell reiterated his intention to bring the inflation rate back to 2%. The central bank will communicate its decision on the next rally tomorrow at 2:00 PM EST.

Disclaimer: At the time of writing, the author of this piece owns BTC, ETH, and many other crypto assets.

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