Markets
Gold and cryptocurrency markets expect recovery
Financial markets are expected to rebound after the release of the latest CPI data by the US Department of Labor. The better-than-expected report showed a slowdown in the inflation rate on a monthly basis as well as from a year earlier. According to the CPI data, inflation in the US slowed, with the figures falling to 0.1% from the previous month.
This brought the annual figures to 3%, their lowest point since the pandemic. This annual decline is the first in about three years, which has generated positive sentiment about favorable macroeconomic conditions in both traditional and digital markets. The historical index rate fell to 3.3% in May from 3.3% in May, while consumer prices declined. While gasoline prices fell by 3.8%, housing and food prices increased by 0.2%.
CPI to boost markets
Financial markets, including stocks, crypto assetsGold and gold prices registered a change in sentiment that influenced the US CPI data. Gold climbed above $2,400 as hopes of a rate cut by the Federal Reserve grew. The precious metal hit $2,414, up more than 1.8% in intraday trading. Similar sentiments were also seen in stocks, although some assets declined.
Chris Larkin, managing director of trading and investments at Morgan Stanley E-Trade, said the CPI data brings the financial market closer to the Fed’s anticipated interest rate cuts.A lot can happen between now and September 18, but unless most of the numbers return to “hot” territory, the Fed’s rationale for not cutting rates may no longer be justified.
That’s close to the Federal Reserve’s target of 2% annual inflation and has held its benchmark interest rate steady amid a gradual decline in inflation over the years.
Another boost for crypto
Positive macroeconomic sentiments Investors are a strong indicator of inflows into cryptocurrency markets. As the Fed eases pressure on markets, investors often send more funds into risky assets, signaling growth for Bitcoin and other assets. Meme parts Bitcoin prices are also expected to make another comeback after the expected jump. At press time, Bitcoin is trading at $57,545, down 0.3% in the last 24 hours, while the overall market cap is at $2.12 trillion a few hours after the CPI data was released.
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David is a financial news contributor with 4 years of experience in Blockchain technology and cryptocurrencies. He is interested in emerging technologies and has an eye for breaking news. Staying abreast of trends, David has reported on several niches including regulation, partnerships, crypto assets, stocks, NFTs, and more. Outside of financial markets, David enjoys cycling and horse riding.