The crypto market today saw an upward trend as the U.S. Bureau of Labor Statistics released the Consumer Price Index (CPI) for February 2023. The BLS released a CPI report showing a 0.4% rise. The rise shows a 6.0% rise pace in the average price of commodities in the United States.
Bitcoin broke above the $26,000 hurdle after the report was released, with the broader crypto market seeing decent movements. The total crypto market cap also exploded, nearing $1.1 trillion. Bitcoin also saw its largest 3-day candle in 762 days, showing bullish momentum.
The report for February shows a little reduction in inflation as the CPI for January was 0.5%, showing a 6.4% annual rise pace. Core inflation, excluding food and energy, went as high as 0.4% in February, trending at a 5.5% yearly pace. Economists noted that shelter prices continued to rise while increases in food and energy costs reduced slightly.
Fed Likely to Reduce Interest Rate Hikes
The CPI report remains an important inflation indicator for the Federal Reserve System. When the Fed’s January meeting minutes were released last month, Chair Jerome Powell said it should not have reduced the interest rate hike but that most officials voted for a 25bps hike.
With investors expecting a half-point increment by the Fed in its meeting on March 22, the recent bank collapse seems to have hampered the motion. Three American banks collapsed last week as they couldn’t cope with the inflation and Fed’s continuous increase in interest rates. Silicon Valley Bank, Signature Bank, and Silvergate Bank collapsed last week.
This recent event would likely see the Fed go a 25bps hike or even a 0% hike to ease the tension in the banking system.
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