U.S. consumer prices, which have a significant impact on the global economy as well as the domestic and foreign cryptocurrency markets, have been announced. Consumer prices in the U.S. recorded the largest increase since 1981. Today, I’ll tell you the related news.
Source = Yonhap News Reporter Kang Gun-taek
U.S. consumer prices have risen more than expected. It is the largest increase in more than 40 years. MEXC 거래소 가입방법 The Fed is expected to further increase the intensity of monetary tightening due to intensifying inflation in all stocks, including food and energy prices as well as monthly rent.
According to a report by the U.S. Bureau of Labor Statistics on the 10th local time, the consumer price index (CPI) in May rose 8.6% year-on-year. This exceeds the 8.3% expected by the Wall Street Journal (WSJ), an economic magazine. Compared to the previous month, it also rose 1% and exceeded the 0.3% increase in April, even exceeding the market forecast of 0.7%.
Excluding volatile food and energy, the core consumer price index rose 6.0 percent from the same month last year and 0.6 percent from the previous month, respectively.
Compared to the same month last year, the core CPI growth rate was slightly lower than 6.2% in April, but the increase rate compared to the previous month was the same as in April.
Consumer prices surged across all sectors last month, the report showed. Daily necessities also posted double-digit gains, breaking the biggest gain in decades.
According to the Ministry of Labor, energy has risen 35 percent from the same month last year, the biggest increase since 2005. Of these, gasoline prices rose a whopping 49% during the same period. Gasoline prices are still hitting record highs every day.
It’s mainly the costs associated with housing, food, and energy that have led to inflation. Energy prices rose 34.6% in May compared to the previous year.
Food prices also rose nearly 12% year-on-year. Housing-related costs, which account for about a third of the CPI, rose 5.5 percent year-on-year and electricity bills also rose 12.0 percent.
The reason for this rise in energy prices is Russia’s invasion of Ukraine. Gasoline prices traded at a record $4.97 a gallon. Food prices also soared following China’s containment of COVID-19 and global drought.
As the CPI results were negative in May, the New York Stock Exchange Index fell about 2% in after-hours trading, and the financial market was also shaken, with interest rates on 10-year U.S. government bonds rising.
For the Fed, which expected prices to peak and stabilize downward, it is expected that the announcement, which is feared to prolong inflation, will continue to raise interest rates even more.
Regarding the Fed, which predicted three consecutive big steps (0.5 points) until July today, some argued that it could take a break from raising interest rates in September if price stability is premised, but it is expected that monetary tightening will continue.
Also, as President Joe Biden’s approval rating is bottoming out, Democrats are expected to struggle further in the mid-term elections in November under the burden of prices.
Writing in the Washington Journal, Sarah House, a senior analyst at Wells Fargo Securities, predicted that inflation is likely to remain for quite a long time and that it is not likely to peak yet.
Meanwhile, the reason why inflationary pressure is appearing throughout the economy is also related to the current labor market situation. Demand is now outpacing supply in the U.S. labor market. Unemployment is at a 50-year low, and low unemployment is likely to lead to higher wages soon. As the COVID-19 crisis enters a lull, travel and service costs are also rising.
The U.S. Federal Reserve has a difficult task of keeping prices in check to prevent a recession.
[Source = Yonhap News Reporter Kang Guntaek]
The Impact of U.S. Inflation on the Cryptocurrency Market
Source = CoinDesk Korea
Since the CPI was announced at 8:30 a.m. local time, virtual asset prices have fallen altogether. According to CoinMarketCap, Bitcoin prices fell by about $500 at the same time shortly after the announcement. At 5 a.m. on the 11th, Korea time, it is staying at around $29, 000, down 3.2% from the previous day.
Ethereum (ETH), the second-largest market capitalization, saw a bigger drop. Ethereum traded at around $1,770 and fell to $1,720 for an hour with the CPI announcement. Four hours later, the price of Ethereum collapsed below $1,700.This is the lowest price per year. In addition, Solana (SOL) fell 7% and Cardano (ADA) fell about 9%.
Today, we are informing you that the results of the U.S. Consumer Price Index (CPI) report recorded a higher-than-expected increase of 8.6%, which may adversely affect the global economic outlook.
The U.S. Federal Reserve’s announcement of a 0.5% increase for the third consecutive year is likely to proceed as planned, and virtual currency is likely to continue its downward trend for the time being as the U.S. government tightens interest rates.
When virtual currency prices are expected to fall, it is wise to refrain from investing in kind or long positions as much as possible.