Financial markets are expected to rally following the release of the latest Consumer Price Index data from the US Department of Labor. The better-than-expected report showed inflation slowing on both a month-on-month and year-on-year basis. The Consumer Price Index data showed that US inflation slowed, falling to 0.1% month-on-month.
This brings the annual figure to 3%, its lowest point since the pandemic. The annual decline is the first in nearly three years, sparking optimism about a favorable macro environment for traditional and crypto markets. The full-year index rate fell from 3.3% in May, when consumer prices fell. Gasoline prices plunged 3.8%, while home and food prices rose 0.2%.
CPI data helps market recover
Financial markets, including stocks; Crypto assetsGold prices recorded a shift in sentiment on Wednesday, reflecting U.S. Consumer Price Index data. Gold prices surged above $2,400 a barrel amid growing expectations of an interest rate cut by the Federal Reserve. Gold prices surged more than 1.8% to $2,414 in intraday trading. A similar sentiment was seen in stocks, although some assets fell.
Chris Larkin, managing director of trading and investing at Morgan Stanley's E-Trade division, explained that the CPI data brings financial markets one step closer to an expected interest rate cut by the Fed.A lot can happen between now and September 18th, but unless most of the numbers move back into “hot” territory, the Fed's reasons for not lowering interest rates may no longer be justified.”
That brings it closer to the Fed's 2% annual inflation target, which has kept its benchmark interest rate in line for years as inflation has slowly fallen.
Further boost for cryptocurrencies
positive Macroeconomic Sentiments This is a strong sign of capital inflows into the cryptocurrency market. As the Fed eases pressure on the market, investors pump more money into risky assets, which is often a sign of higher Bitcoin and cryptocurrency prices. Meme Coin Following the expected surge, Bitcoin is also expected to rise again. At the time of writing, Bitcoin was trading at $57,545, down 0.3% over the past 24 hours, while the cryptocurrency market cap was $2.12 trillion, just hours after the CPI data was released.
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