Bitcoin, Ethereum Drop as US Inflation Jumps More Than Expected
Prices of bitcoin (BTC) and ethereum (ETH) fell today as traders feared more aggressive monetary policy tightening after the US Consumer Price Index (CPI) showed that inflation in the world’s largest economy has reached 7.5% year-over-year, coming in well above analysts’ expectations.
The change in consumer price index (CPI) since last month came in at 0.6%, above the 0.4% expected. Meanwhile, the so-called Core CPI, which excludes food and beverages, came in at 6% year-over-year.
The rise in CPI was the largest since February 1982, while the rise in Core CPI was the largest since August the same year, the US Bureau of Labor Statistics wrote.
As of 14:45 UTC BTC was down by 2.5% while ETH was down by 3.45% in the 15 minutes that have passed since the inflation figure was released. The price of BTC stood at USD 43,897, down 0.6% on a 24-hour basis, while ETH stood at USD 3,150, down 1.6% over the past 24 hours.
Ahead of the release of today’s inflation data, White House spokesperson Jen Psaki had already said that they expect the number to be “high,” and that a year-on-year number of above 7% “would not be a surprise.”
Continued higher-than-expected inflation numbers in the US are now also causing some analysts to rethink whether the Federal Reserve (Fed) will hike rates by 0.25 percentage point per hike, as is widely expected, or if some of the hikes this year will be 0.5 percentage point.
“If we don’t start gliding lower in line with expectations soon, the market is going to be pricing some 50bps Fed hikes into the equation for 2022,” Jim Reid, Head of Global Fundamental Credit Strategy at Deutsche Bank, said in a comment ahead of today’s inflation data, according to Reuters.
The same sentiment was also shared in a note by Mor
Read more on cryptonews.com
