key takeaways
- The CPI print for November came in today at 7.1%.
- Printing is 0.6% lower than in October and 0.2% lower than expected.
- The crypto market reacted positively to the news, with BTC and ETH rising 4.65% and 6% each before pulling back slightly.
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The year-on-year inflation rate stood at 7.1% today, reinforcing the market’s belief that inflation may have peaked and the Federal Reserve could ease its aggressive monetary policy.
Inflation loses strength
It seems that inflation is really cooling off.
The Consumer Price Index (CPI) for November He came in at 7.1% today, solidifying hopes that inflation has peaked and entered a steady downward trend. The figure is 0.2% lower than the 7.3% expected by analysts for this month; also marks a 0.6% decline from the printout of the CPI for Octoberwhich reached 7.7%.
Markets reacted positively to the print, with BTC and ETH initially rising 4.65% and 6% respectively on the day, briefly touching $18,000 and $1,350, before slightly falling again. At the time of writing, the top cryptocurrencies were each trading at $17,780 and $1,327.
The reaction from legacy markets was similar. The S&P 500 opened 2.60%, the Nasdaq 3.60% and the Dow Jones 2%. However, they quickly gave back a portion of their gains and are currently only up 1.31%, 0.59%, and 2.43% respectively.
The crypto market certainly welcomes signs of a decline in inflation, as they herald a potential easing of the aggressive monetary policy the Federal Reserve has been pursuing all year. To combat the rise in the price of basic consumer goods, the US central bank began raising interest rates in March, first by 25 basis points, then by 50 basis points, and then by 75 basis points all months, rapidly bringing them from about 0%. to about 4%.
Federal Reserve Chairman Jerome Powell indicated in a public appearance two weeks ago that the next rate hike is likely to be as little as 50bp, citing the need to “moderate the pace of… rate hikes” due to cooling. of inflation and the lagged effect of fast rates. increases in the economy. However, Powell reiterated his intention to lower the inflation rate to 2%. The central bank will broadcast its decision regarding the next hikes tomorrow at 14:00 EST.
Disclaimer: At the time of writing, the author of this article owned BTC, ETH, and various other crypto assets.
