US Inflation Data Allay Concerns; Crypto economy jumps 11% higher as market analysts await next Fed decision –
The US Department of Labor released the consumer price index (CPI) on Tuesday. Although the inflation increased in February year-on-year, the increase was expected, and the annual inflation rate for all items was 6%. Cooling inflation has allayed some concerns, but fears of financial contagion have spread. Market strategists continue to await the Federal Funds Rate decision.
Market awaits Fed rate decision after CPI report
Inflation in February was in line with expectations, with the consumer price index (CPI) rising 0.4% over the past month, for an annual pace of 6%, according to the latest report from the US Bureau of Labor Statistics. “Over the past 12 months, the headline index is up 6% before seasonal adjustment,” reads the CPI report. “The index for accommodation was the main contributor to the month-to-month increase of all items, accounting for over 70% of the increase, while indices for food, recreation, and household equipment and operations also contributed.”
Overall stock market sentiment has improved as three of the four US benchmark stock indices, excluding the Russell 2000, posted gains. On Monday, however, three of the four leading indices were down, with the exception of the Nasdaq Composite. Additionally, Monday marked the largest three-day drop in two-year Treasury yields since “Black Monday” in 1987. On Tuesday, however, the two-year Treasury yield rallied following the CPI report.
According to Kevin Cummins, chief US economist at Natwest Markets, consumer inflation has eased but has not impacted the market significantly. “As far as we thought it was important [CPI] Given the background, it’s definitely not nearly as much of a market mover anymore,” Cummins said in an interview with CNBC. The Natwest Markets analyst also believes the Fed will not hike interest rates in March. While stock markets showed some improvement following the release of the Labor Department’s CPI report, precious metals such as gold and silver saw a small decline as of 9:00 a.m. ET on Tuesday.
A day earlier, Monday, gold was up 2% and silver was up 6% per ounce against the US dollar. However, both precious metals are down as of 9:00 a.m. Tuesday, according to the New York Spot Price, with gold down 0.80% and silver down 0.71%. Conversely experienced cryptocurrencies a significant rebound, with the global cryptomarket capitalization up 11.17% to $1.13 trillion. Bitcoin (BTC) surged 14.72% above the $26,000 per unit zone, and the second largest crypto asset Ethereum (ETH) rose 8.43% to $1,744 per Ethereum.
What do you think the Fed’s Federal Funds Rate decision will look like and how do you think it will affect the overall economy and financial markets? Share your thoughts in the comments below.
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Source: Crypto News Deutsch
