Bitcoin and Ethereum Remain Stable Despite Release of Inflation Data

Despite recent revelations of the Consumer Price Index (CPI), a key indicator of inflation in the United States, the prices of major cryptocurrencies, such as Bitcoin and Ethereum, remained stable. These numbers suggest a steady cooling of US inflation.

Bitcoin and Ethereum Respond Minimally to Inflation Data

After the release of the inflation figures for June by the US Bureau of Labor Statistics (BLS), Bitcoin and Ethereum showed little or no reaction. Bitcoin held steady at around $31,500, while Ethereum only showed a modest 0.3% increase, with the price now hovering around $1,880.

The figures released showed a monthly increase in CPI of 0.2% and an annual increase of 3.0%, which was slightly below economists’ expectations.

Central Bank Efforts Appear Effective

The core CPI figure, which excludes more volatile sectors such as food and energy, rose a modest 0.2%. This is the “smallest monthly increase in this index since August 2021,” according to the BLS.

Since March 2022, the Federal Reserve has been steadily raising its policy rate to bring back high US inflation, which peaked at 9.1% last June, to the 2% target. The central bank’s efforts seem successful so far as annual inflation is already 1% lower than last month.

Markets Unmoved Despite Falling Inflation

Rising interest rates over the past year have contributed to the fall in stock and crypto prices, resulting in massive layoffs at major technology and blockchain companies. However, the recent drop in inflation, which is usually seen as a bullish signal for the markets, has not yet had a significant impact on Bitcoin and Ethereum prices.

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While the Federal Reserve left its policy rate unchanged last month, Fed Chairman Jerome Powell has not clarified the future path of rate hikes.

According to the CME FedWatch tool, markets are 91% confident that a further 0.25% rate hike will occur at the next meeting of the Federal Open Markets Committee (FOMC) on July 26.

Markets Await Publication of Personal Consumption Index

Markets are now awaiting the June release of the Personal Consumption Index (PCI), which reflects how consumer behavior is changing over time. The PCI index, which the Fed considers a strong predictor of future inflation trends, is currently estimated by the Fed at 3.2%.

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