US Inflation Rate Drops to 4.9% in April; Bitcoin Surpasses $28K

Last week, the Federal Reserve hinted that it might take a break from raising interest rates, despite the fact that inflation is still significantly higher than its desired 2% target.

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Inflation (Getty Images)

The April inflation report was released Wednesday morning “Image source coindesk”

According to the Consumer Price Index (CPI) report released by the Bureau of Labor Statistics (BLS) on Wednesday morning, the yearly U.S. inflation rate decreased from 5.0% in March to 4.9% in April. This was in line with economist predictions, who had forecasted a 5.0% rate.

After the news, the price of bitcoin (BTC) increased by over 1%, reaching slightly above $28,000 in just a few minutes.

In April, the Consumer Price Index (CPI) saw a 0.4% increase, surpassing expectations for a 0.4% rise and significantly higher than the 0.1% increase observed in March.

In April, the core Consumer Price Index (CPI), which excludes food and energy costs, experienced a 0.40% increase. This aligns with expectations for a 0.4% rise and is similar to the 0.4% increase observed in March. On an annual basis, the core CPI rate in April was 5.5%, in line with forecasts for 5.5% and slightly lower than the 5.6% rate recorded in March.

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During its most recent meeting in May, the U.S. Federal Reserve’s Federal Open Market Committee (FOMC) hinted that it is considering a temporary halt to the series of interest rate increases. These rate hikes have taken the benchmark fed funds rate from around 0% in early 2022 to the current target range of 5.0%-5.25%. Despite the rapid pace of rate increases, inflation has not yet reached the Fed’s 2% target. Additionally, the central bank is concerned about the growing challenges faced by the U.S. banking system, resulting in the failure of several regional banks, including the recent case of First Republic Bank.

Currently, traders are speculating that the slight decrease in inflation observed this morning could potentially allow the Federal Reserve to implement looser monetary policies. As a result, there has been a decline in the U.S. 10-year Treasury yield by seven basis points, settling at 3.45%, while the 2-year yield has decreased by nine basis points, reaching 3.94%.

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  • SHBAZ

    A crypto enthusiast, Loves to write, Loves to explore and stay up-to-date about the latest developments in the crypto world. #Btc #Crypto #NFT

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