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US CPI Inflation Drops To 7.1%, Bitcoin And Ethereum Rises

  • US CPI falls to 7.1% from 7.7% in October. December's lowest. November CPI exceeded estimates by 7.3%.

  • Bitcoin (BTC) and Ethereum (ETH) prices rose after the U.S. Bureau of Labor Statistics released November Consumer Price Index (CPI) data.

14-Dec-2022 By: Ashish Sarswat
US CPI Inflation Dro

Release of the U.S.

Following the release of the Consumer Price Index (CPI) statistics for November by the U.S. Bureau of Labor Statistics, the prices of Bitcoin (BTC) and Ethereum (ETH) soared. From 7.7% in October, the CPI in the US drops to 7.1% today. The lowest level since December. The November CPI report was 7.3% over expectations.

After the inflation figures, the price of Bitcoin (BTC) increased by more than 3%. The price of BTC has increased 5% during the past day, rising from a low of $17,076 to a high of $18,100. Trading activity is evident since the volume of transactions increases by nearly 30%.

Following the announcement of the CPI data, the price of Ethereum (ETH) increased by more than 3%; it is currently trading at $1,316. With a rise of over 5%, the 24-hour low and high are $1,254 and $1,350 respectively. In the last 24 hours, the trade volume increased 35%.

The US CPI Inflation Rate for November is 7.1%.

On December 13, the U.S. Bureau of Labor Statistics issued the November CPI data, which came in at 7.1% as opposed to the market's forecast of 7.3%. The Core CPI is 6.0% as opposed to the predicted 6.1% in November and is down from 6.3% in October.

All of these increases were less than during the period ending in October, with the exception of the energy index, which rose by 13.1%, and the food index, which rose by 10.6%. But instead of increasing by the expected 0.3%, the CPI only increased by 0.1% when compared to the previous month.

Wall Street anticipated that the CPI statistics would be lower due to the slowing of inflation. Investors anticipating lower inflation and a smaller Federal Reserve interest rate increase this week drove up U.S. stock prices on Monday. The S&P 500 and Nasdaq futures are up roughly 2.8% and 3.5%, respectively, while the Dow Jones futures are up 2.5%.

If the U.S. CPI registers at 6.9% or less, JPMorgan forecasts a 10% increase in stock prices. JPMorgan, however, had anticipated a CPI figure of 7.2%. The decline in the CPI also contributed to the recent decline in the correlation between the U.S. stock market and the cryptocurrency market.

The "Wolf of Wall Street" Jordan Belfort and well-known analyst Michael van de Poppe forecasted a rise in Bitcoin and Ethereum values by Christmas, with the US CPI and Fed rate hike serving as the key indicators of the crypto market bottom.

With dovish Fed, the price of Bitcoin will increase.

The Federal Reserve's decision to raise interest rates the following day will be influenced by the decline in November's CPI. Jerome Powell, the chair of the Fed, previously predicted a slowing in the rate-hike pace in December and the following months.

The likelihood of a rate increase of 50 basis points occurring before the CPI figure was 72.3%, per the CME FedWatch Tool. After the CPI statistics, the likelihood of a 50 bps rate increase increased by more than 80%.

After the CPI figures, the US Dollar Index dropped by 1.30% to 103.70. Investors should anticipate a rise in Bitcoin and Ethereum values during the next few weeks.

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