Positive inflation numbers?
Yesterday the American version of the Central Bureau of Statistics announced the new inflation figures and the reaction of the market showed that they were positive. It is true that inflation is already much lower than during the peak of June 2022. At the time, the consumer price index (CPI) reached a score of 9.1 percent. It has since dropped to 6.5 percent.
However, this number is still far from the target of 2 percent. That’s where the Federal Reserve ultimately wants to take inflation. Much remains to be done to achieve this.
Federal Reserve officials also indicate that interest rates should probably go up a bit more and then stay at that level throughout 2023. They don’t expect rate cuts this year, which isn’t necessarily a good outlook for investments like Bitcoin and stocks.
Next interest rate meeting
The next interest rate meeting is scheduled for February 1. Then the Federal Reserve meets and interest rates are expected to rise by 0.25 percent. That increase would bring the interest rate to 4.50 to 4.75 percent. This puts us very close to the 5.00 percent interest rate where many senior Federal Reserve officials see interest rates end.
In that sense, we are approaching the end of the cycle and we may be at or near the bottom. On the other hand, a recession can throw a spanner in the works and push prices further down. In that respect, it is an exciting period that at first glance leaves little room for rising prices and certainly no room for a bull market. From that perspective, the rise of Bitcoin can be called special.
