Here’s How the Latest Hot US CPI Numbers Impacted Crypto Markets
Hotter-than-expected US Consumer Price Index (CPI) inflation numbers did little the shift sentiment in the crypto market on Thursday.
Bitcoin (BTC) was last trading just under $26,700, just to the north of its 50-Day Moving Average (DMA), which appears to be offering support for now, but still trading with a negative bias, down around 0.7% on the day.
The world’s largest cryptocurrency is still trading with a negative bias since breaking to the downside of a short-term uptrend that it had been in since mid-September earlier this week.
The latest CPI report showed headline inflation running at 0.4% MoM and 3.7% YoY, both 0.1% above median economist expectations.
Core CPI, which is monitored more closely by the US Federal Reserve as a gauge of underlying price pressures in the US economy, was in line with expectations at 0.3% MoM and 4.1% YoY.
The market’s muted reaction could be explained by the fact that the higher-than-expected headline reading was driven by a surprise jump in rental costs.
According to Reuters, economists expect the jump in rental costs to decline in the coming months, given it is at odds with various independent surveys that tend to lead the CPI by a few months and all show falling rental costs.
Core inflation running at 0.3% MoM and 4.1% shows the Fed still has some way to go in terms of bringing inflation back to its 2% goal.
But with interest rates at multi-decade highs at 5.25-5.5%, more than 1% above inflation (implying a “real interest rate” of over 1%), the Fed will want to err on the side of caution regarding further tightening, as it may have already done enough.
That point is further driven home by that mortgage rates are at 23-year highs and credit card borrowing costs at all-time highs, as
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