How Crypto Market Might React To The CPI Report Today?
The post How Crypto Market Might React To The CPI Report Today? appeared first on Coinpedia – Fintech & Cryptocurreny News Media| Crypto Guide
The U.S. Bureau of Labor Statistics will release July Consumer Price Index (CPI) data for August 10 at 12:30 GMT. The CPI is an indicator of a nation’s inflation levels.
The CPI is a measure of the monthly change in price paid by consumers. The Federal Reserves consider recent CPI data to decide the interest rates. The economists have expected inflation to come down to 8.7 percent from 9.1 percent. A modest increase of 0.2 percent is projected monthly, after a leap of 1.3 percent in June.
The Relation Between Crypto and CPI
The CPI is used as one of the indicators for inflation and the Fed curbs higher inflation rates by hiking the interest rate. Higher rates frequently result in market instability, which includes the cryptocurrency market.
The US inflation rates have been a cause of concern for the crypto community. The CPI was 9.1 percent for June, reflecting the highest inflation level in 40 years. Bitcoin suffered the worst financial quarter in over a decade, resulting in the crypto market being highly volatile.
The CPI was 9.4 percent in July but there was no significant impact on the crypto market. Lark Davis, a crypto influencer, stated that high inflation was already priced in by the time. Many economists thought that the Fed would change its hawkish approach due to concerns about a recession.
However, if the CPI numbers are still high then the Fed might make another unusually large hike.
Ahead of the reveal
Numerous economists have predicted that CPI would be 8.7 percent. However, Michael J Kramer, founder of Mott Capital, said that according to the predictions by Cleveland Fed, the CPI is to be 8.8 percent. The CPI has always been higher than the estimations by Cleveland Fed since Fall 2021, he said.
Davis expects market volatility ahead of CPI reveal. He said that Bitcoin’s daily RSI uptrend is barely hanging on. Both Bitcoin and Ethereum are down by 5 percent in anticipation of today’s reveal.
