Latest data showed US CPI rose 0.3% in April, below market expectations of 0.4%. However, US Core CPI increased by 3.6% year-on-year, sparking market concerns. Still, with inflation cooling, the price of Bitcoin began to rise. Elsewhere, gold prices made an upward move.
US CPI was below expectations, core CPI caused doubt!
The latest data from the US Department of Labor showed that the US Consumer Price Index (CPI) increased by 0.3% in April, below the market expectation of 0.4%. It was noteworthy that the CPI increased at the same rate in the previous month. On an unadjusted basis, the US CPI, a core figure for understanding the level of inflation, rose 3.4% year over year (YoY), in line with market expectations.
At the same time, Core CPI, which excludes food and energy prices, increased by 0.3% on a monthly basis, in line with Wall Street forecasts. On an annual basis, Core CPI decreased to 3.6% after reaching 3.8% in the previous month. Although inflation has fallen, it still remains above the Fed’s 2% target range. This negatively affects the sentiment of global investors. However, despite this, investors reacted positively to the better-than-expected numbers.
How will the Fed react to the latest data?
cryptokoin.comAs you follow from , on Tuesday, Fed Chairman Jerome Powell said inflation is still high. Therefore, he implied that the central bank will not change the interest rate for a long time. In particular, inflationary pressure kept investors on the sidelines and triggered increased volatility in the market. However, the latest CPI data gave some relief to investors. In this context, it somewhat alleviated concerns that the Fed would take a more hawkish step. According to the CME FedWatch Tool, there is a 96.9% chance that the Fed will maintain its current interest rate level at its upcoming June meeting.
Meanwhile, following the CPI data, the US 10-year Bond Yield decreased by 2.07% to $4.354. The US Dollar Index decreased by 0.42% to $104,455. However, although the increase in inflation data fuels concerns, investors seem to be focusing on other areas for now.
Bitcoin started the rally!
Following the latest data, Bitcoin price reached a 24-hour high of $63,773.87. At the time of writing, BTC was trading at $63,656.35, up 3.48%. The one-day trading volume of the leading crypto also increased by 8.77% to $27.82 billion. Additionally, Bitcoin Futures Open Interest (OI) increased by 1.75% in the last four hours to 474.38 thousand BTC or $30.25 billion, according to CoinGlass data. This reflects investors still acting with risk-betting appetite following cooling inflation data.
Gold prices continued their rise
Investors breathed a sigh of relief as consumer prices increased in line with expectations. After this, the gold market is gaining momentum again. Gold prices were trading in positive territory before the report. However, it is seeing some new buying interest as an initial reaction to the latest inflation data. Spot gold was last traded at $2,373.10, up 0.66% on the day.
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