On May 15th, the U.S. Bureau of Labor Statistics released the eagerly anticipated inflation figures for April. The inflation rate in the United States stands at 3.4 percent year-over-year, aligning with expert forecasts of 3.4 percent.
This marks a slight decrease from the previous month, following four consecutive increases. In the last month, the inflation rate had risen to 3.5 percent, surpassing analysts’ expectations once again. The troubling trend of rising U.S. consumer prices might now be coming to an end. Back in November 2023, the inflation rate was 3.1 percent.
BTC-ECHO market expert Stefan Lübeck explained the impact of inflation on the crypto market in his weekly overview: “If the forecasts are met or even undershot, it could indicate that the recent increase in inflation over the past months was merely temporary and the overall inflation rate will continue to decrease.”
The U.S. stock market, along with Bitcoin and other cryptocurrencies, is expected to react positively to declining consumer prices. A fall in the U.S. Dollar Index (DXY) would likely follow, increasing the chances of two interest rate cuts in 2024.
However, if the inflation rate remains at the previous month’s level or rises again, similar to the producer prices reported yesterday, it could negatively impact risk assets and cryptocurrency prices.
Federal Reserve Chairman Jerome Powell stated at an event on Tuesday, May 14th, that while restrictive monetary policy may need to persist if inflation remains high, another interest rate hike by the Fed is very unlikely.