The U.S. Bureau of Labor Statistics recently published the Consumer Price Index (CPI) report, indicating that inflation has risen 0.1% from last month in March and 5% from a year ago. This is the ninth consecutive month that annual inflation has dropped following the nine times the U.S. Federal Reserve raised the federal funds rate.
Investors were pleased to hear the latest CPI report, as it revealed that inflation has cooled over the last nine months. The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.1% in March on a seasonally adjusted basis, after increasing 0.4% in February. However, inflation is still far from reaching the Fed’s stated goal of 2%. Nevertheless, the global crypto economy’s total market capitalization jumped to $1.23 trillion after the CPI report was published, indicating that investors are optimistic about the state of the economy.
Bitcoin (BTC) is currently trading above the $30,000 range, up 0.80%, while gold is up 0.81% and trading for $2,021 per troy ounce, and silver is up 1.82% to $25.60 per ounce. The CME Fedwatch tool indicates a 67.5% chance that the Fed will raise the benchmark rate again by 25 basis points in May. While the market is pricing in a 25-basis-point increase next month, several economists believe it will likely be the final rate hike of 2023.
Despite policymakers believing the inflation rate can drop down to the 2% region, gold bug Peter Schiff has argued that America’s “days of sub-2% inflation are gone,” and that high inflation is here to stay. However, not everyone is as pessimistic as Schiff. The CEO of Your Money Line, Peter Dunn, emphasized that people should feel good about the recent trends.
Overall, the impact of the CPI report on the economy is mixed. While there is optimism in the crypto market and some commodities, inflation is still a concern for policymakers and economists. It remains to be seen whether the Fed will raise the benchmark rate again in May, but it is clear that investors are closely monitoring the situation and adjusting their portfolios accordingly.
