A decisive inflation. From bullish elements for the cryptocurrency market and Bitcoin price (BTC) in 2024we often talk about approval of a spot BTC ETFor the process of halving which will further rarefy the issuance of new bitcoins. But the Monetary Policy of the United States, and its Federal Reserve (the Fed) probably has an even bigger role to play. And this policy closely monitors US inflation (hint CPI) to determine the course of action to follow: increase, stagnation, or decline for key rates of the Fed?
The CPI figure was watched like milk on fire
This December 12, 2023, the different financial markets – and in particular those of actions and crypto-assets – carefully scrutinized the delivery of the Consumer Price Index (CPI), the United States Consumer Price Index.
This inflation comes from a long waysince it reached a more than worrying peak in the summer of 2022, reaching then 9.1% over a year. It must be said that, since then, the Federal Reserve started a crazy increase in its key rates, violently increased from 0.25% to 5.5% between the beginning of 2022 and this summer of 2023. Which did not fail to strongly destabilized several markets (bank loans, real estate, business loans, etc.), while worrying the stock markets (and cryptos).
Fortunately, US inflation has calmed down significantly in recent months, and returned to 3.2% last month. Today’s CPI figure was determiningbecause if inflation remains low and does not rise again, the Fed is much more likely to end up lower its ratesor at least, maintain them as is, without new painful increases for the markets.
US inflation at 3.1%, as expected: Fed rate cut in sight?
After 2:30 p.m., the ax fell: consumer prices over a rolling year have now fallen by 3.2% to 3.1%exactly as they were anticipated financial analysts. Although the decrease is very modest, it will in the right direction for the markets.
With this new (slight) decline, it is very unlikely that the Federal Reserve will announce further rate increases. The question now arises: between the stagnationor an announcement of next decrease key rates at the next Fed meeting.
Financial markets should logically be satisfied (and bulls) following this inflation which continues its decline towards the Fed’s ambitious objective, set at 2% for the CPI. What add oneself still at tailwinds that could push Bitcoin and the crypto-asset market very high in 2024.