After the U.S. Bureau of Labor Statistics published its latest CPI figures, both Bitcoin and Ethereum fell. After the publication of the Consumer Price Index (CPI), several leading cryptocurrency cryptocurrencies, Bitcoin, and Ethereum dropped points on Tuesday morning.
Both Bitcoin and Ethereum lost significant gains over the past week shortly after the CPI numbers were published.
The index today revealed an 8.3% rise in the basket of goods compared to August. This is 0.1% more than the July reading. It beats expectations and suggests that inflation may be more stubborn than anticipated.
Bitcoin falls 5% on CPI Data
After falling by more than 5% over the last hour, Bitcoin, the most valuable cryptocurrency, is currently trading at \$21,450. However, it is still up by around 8% in the past week.
According to CoinMarketCap, Ethereum has dropped more than 6% in the last hour and is currently trading around \$1625,
Traditional markets in the Nasdaq 100, and the S&P 500 both fell 2.7% and 22%, respectively.
Understanding the consumer price indexThe Consumer Price Index is a monthly measure of the cost of different goods and services such as milk and used vehicles. These numbers are used by economists to identify inflation. The CPI numbers reveal some of the highest levels of inflation in the United States over the past 40 year. The August numbers are no exception.
Although the increase was minor, it will likely give the Federal Reserve permission to keep raising interest rates. This central bank’s main tool for cooling down the economy, is the Federal Reserve. The Fed raising rates makes it more costly to borrow money. This can result in fewer investments, slower hiring and ultimately, less spending.
Also, rising rates have an impact on crypto markets.
The Fed will meet again on September 20, and today’s CPI report will be the last reading. It is expected chairman Jerome Powell will raise rates again by another.75 base points.