US inflation hit 8.3% in April, down from a peak of 8.5% the month before, but still above expectations, new data from the US Bureau of Labor Statistics show.
“Over the last 12 months, the all items index increased 8.3% before seasonal adjustment,” the announcement said, adding that price increases for “shelter, food, airline fares, and new vehicles were the largest contributors.”
The market’s expectation was that inflation would come in at 8.1% in April, down from 8.5% in March.
Meanwhile, the core-CPI (Consumer Price Index), which excludes prices on food and energy, came in at 6.2%, down from 6.5% a month earlier.
Ahead of the release, bitcoin (BTC), ethereum (ETH), and S&P 500 stock index futures all traded cautiously higher for a day.
Commenting ahead of the release of today’s inflation numbers, Daniel Morris, chief market strategist at BNP Paribas, told the Wall Street Journal that uncertainty among investors is now at an unusually high level.
“If we only had rising policy rates, or only had high inflation, or only had China or only had Ukraine, we could probably manage that. But we’ve got all that simultaneously. That’s why it’s such a particularly challenging environment,” Morris said.
Notably, the White House did not issue any kind of warning, as they have done in the past, that the inflation number will be high. This was interpreted by some ahead of the release to mean that it will likely be lower than last month’s report.
Last month, White House spokesperson Jen Psaki said the administration expects headline inflation for March to be “extraordinarily elevated.”
As pointed out by Quantum Economics founder Mati Greenspan, the market’s view of inflation has changed quite a bit recently.
While high inflation used to be considered good for bitcoin and the broader crypto space, this has now reversed to become a net negative, as it is believed that the US Federal Reserve will then move faster with its interest rate hikes.
Bitcoiners 6 months ago: I hope inflation numbers are big so bitcoin can moon.
Bitcoins today: I hope inflation comes down to stop the bleeding.
— Mati Greenspan (@MatiGreenspan) May 11, 2022
Combined, the trajectory of inflation and wages are key factors in determining how much the Fed will raise interest rates at its next meeting.
Source: Cryptonews
