Bitcoin returns to USD $69,000 after US inflation report of 3.3% in May – DiarioBitcoin
By Hannah Perez
While the inflation reading was unchanged month over month, it fell 0.1% year over year. The news could be welcomed by US Federal Reserve officials.
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- US inflation was unchanged in May, but fell 0.1% year over year
- The 3.3% annual reading in May was below economists’ forecasts
- Bitcoin returned to USD $69,000 after a slip on Tuesday
- Federal Reserve expected to rule on interest rates later
The pace of inflation in the United States again showed signs of slowing in May, a fact that could be welcomed by Federal Reserve (FED) officials.
The U.S. consumer price index (CPI), a widely followed tracker that measures the cost of a broad basket of goods and services, stood at 3.3% in May from a year earlier, a drop of 0.1% compared to April, as reported this Wednesday by the Bureau of Labor Statistics of the Department of Labor.
The monthly reading was unchanged in May, after rising 0.3% last month. The data positively surprised economists, who anticipated a monthly gain of 0.1% and an annual rate of 3.4%, reported CNBC.
The core CPI, which excludes food and energy costs, also showed a better result from the previous report, increasing 0.2% month-over-month and 3.4% year-over-year in May. This compared to monthly readings of 0.3% and annual readings of 3.6% seen in April and respective estimates of 0.3% and 3.5%.
Bitcoin returns to USD $69,000
Bitcoin, which has remained sensitive to economic indicators in the US, reacted positively to the news. The leading cryptocurrency by market capitalization rose rapidly following the report to surpass the USD $69,000 mark, this after a sharp drop on Tuesday to the USD $66,100 area.
The rest of the cryptocurrency market reacted in a similar way, rising in price after the latest inflation data in the United States was known. While many of the main digital currencies show gains of 2% in the last 24 hours, most still have weekly losses of up to two percentage points.
Eyes on economic data
Cryptocurrency market participants have been keeping an eye on economic data in the US for clues about the prospect of an imminent interest rate cut by the central bank.
The FED raised reference rates at an accelerated pace since March 2022, in an attempt to control inflation, which put downward pressure on the markets. Rates have remained unchanged for six consecutive periods, at a range between 5.25% and 5.5%, amid stagnant inflation.
FED officials will meet this Wednesday to discuss a possible timeline for easing monetary policy, a decision they have been reluctant to make while inflation remains stubbornly above its 2% annual target.
While May data shows slight positive signs, it is still possible that the Federal Reserve will wait until the end of the year to cut rates. 99% of market participants expect rates to remain unchanged, tool says CME FedWatchalthough any comments from officials today could still change the outlook and have an impact on prices.
In contrast to U.S. expectations, several key global central banks have already begun cutting benchmark rates. The European Central Bank did so last week after Canada, Switzerland and Sweden took the same initiative.
Bitcoin reached a historical price record of over USD $73,000 in March but since then it has not managed to return to the record mark. Traders anticipate that looser monetary conditions in the US could help fuel the next leg of the cryptocurrency rally to record high prices.
Article by Hannah Estefanía Pérez / DailyBitcoin
Picture of Unsplash
WARNING: This is an informative article. DiarioBitcoin is a media outlet, it does not promote, endorse or recommend any particular investment. It is worth noting that investments in cryptoassets are not regulated in some countries. They may not be suitable for retail investors as the entire amount invested could be lost. Check the laws of your country before investing.
