US CPI The data came in higher than expected. With the release of the data, the cryptocurrency market also reacted negatively. However, results change frequently due to volatility. Here are the incoming details.
The US Bureau of Labor Statistics released the Consumer Price Index (CPI) data for January. Although the expectations are for a softening in the data, they came in as 6.4%, slightly above the 6.2% expectation. This raised questions about the fall in interest rates.
On a positive note, however, the recent drop in inflation marks such a drop for the seventh month in a row, even though it missed market expectations. The CPI for urban consumers rose 0.5 percent in January on a seasonally adjusted basis, the statement said. This is a significant increase compared to a 0.1 percent increase for the same indicator in December.
US CPI Data Above Expected
Although the January inflation expectation was 6.2%, the incoming data was recorded as 6.4%. Core CPI, on the other hand, came in at 5.6%, compared to the 5.5% expectation. The data led to a slight rise in the US Dollar Index (DXY), which currently stands at 102.95.
However, the latest inflation figures are a welcome trend in the context of the high inflation the economy has witnessed in recent months. With the Fed’s ultimate goal of reducing inflation to below 2%, the market will expect further tightening in monetary policy.
While volatility is damaging in the short term, it looks more promising in the long term. Traders, the Fed’s focus on controlling inflation has so far backfired. The Bitcoin price, on the other hand, moved and rose shortly after the momentary decline.