Inflation rose in February, but in line with expectations, and will be an important basis for whether the Fed continues to raise interest rates. The Consumer Price Index (CPI) rose 0.4% in February, bringing inflation for the year to 6%, in line with Dow Jones estimates, according to the Labor Department report. Excluding food and energy prices, the core CPI rose 0.5% in February and is up 5.5% over the past 12 months.
According to CoinMarketCap, the news had a positive impact on the crypto market, with major cryptocurrencies gaining more than 10%. The price of Bitcoin surged 18% above $26,000, reaching $26,213 at press time.
1 hour bitcoin chart. Source: TradingView
Meanwhile, ethereum rose 11 percent to $1,755. Other cryptocurrencies, including OKB, LTC, SOL, DOT and BNB, also saw gains ranging from 5% to 25%.
1-hour ETH chart. Source: TradingView
Wall Street giants believe the Federal Reserve will abandon its policy of aggressive rate hikes amid the US banking crisis. The latest non-farm payrolls and unemployment data also support a rate hike of 0 or 25 basis points in March. Goldman Sachs, for example, sees no chance of a Fed rate hike at next week’s meeting, citing “near-term stress” in the financial sector. The firm had previously expected the Fed to raise rates by 25 basis points.
break in: #bitcoin Soars more than $25,000 as U.S. CPI shows annual inflation at 6% in February @azcoinnews https://t.co/rgYCkUNhza
— Kyptos (@azcoinnews) March 14, 2023
Analysts believe that the Fed will print money again after the CPI and Bitcoin will fly in a parabola. Others suggested after Monday’s closed-door meeting that quantitative easing (QE) could be used to inject liquidity during the U.S. banking crisis. Federal Reserve Chairman Jerome Powell may also abandon plans to raise interest rates this month, creating positive sentiment for investors.
To sum up, the rise in inflation in February was in line with expectations, which will become an important basis for the Fed to decide whether to continue raising interest rates. The positive impact on the crypto market has been huge, with several major cryptocurrencies posting double-digit gains. Wall Street giants believe that the Federal Reserve will abandon its aggressive policy of raising interest rates in the current US banking crisis, and expect that the quantitative easing policy will inject more liquidity into the market economy.
- Bitcoin surges to $24,000, leading to market-wide recovery
- Has the Banking Crisis Proved Bitcoin a Safe Haven?
according to Kyptos