On Wednesday, cryptocurrency prices remained stable as the latest inflation statistics from the United States showed a modest uptick.
Сryptocurrency Prices Did Not Change Significantly After The Publication Of August's CPI
On Wednesday, cryptocurrency prices remained stable as the latest inflation statistics from the United States showed a modest uptick. According to the Bureau of Labour Statistics (BLS), the Consumer Price Index (CPI) climbed 3.7% in the year to August, slightly exceeding economists' predictions of 3.6%. In August, the index rose 0.6% month on month, owing primarily to higher gasoline prices.
Following the release of the report, Bitcoin (BTC) traded around $26,270, showing a 1.6% uptick over the past day. Ethereum (ETH) experienced a 1.9% increase to approximately $1,620.
In preparation for its next interest rate announcement on September 20, the Federal Reserve will evaluate the CPI report, as well as other indicators such as the US labor market and recent Personal Consumption Index (PCI) figures. Because inflation reached 9.1% in June, the largest yearly increase since 1981, the Fed has taken a hard position on monetary policy. Higher interest rates are meant to calm the economy by increasing the cost of borrowing.
Higher interest rates have an impact on cryptocurrencies as well as other risk assets such as equities, in addition to economic growth. Cryptocurrencies are under pressure as U.S. Treasuries become more appealing to investors. Despite a considerable drop since June, inflation remains above the Fed's 2% annual target.
The Fed raised its benchmark interest rate to a range of 5.25% to 5.5% in July, marking a 22-year high. The decision followed a skipped rate hike in June, which was the first time the Fed had refrained from raising rates in 18 months.
Traders currently anticipate a 91% chance that the Fed will maintain rates at its upcoming meeting, with a 5% chance of a rate cut in January of the following year, according to the CME Group's FedWatch Tool.
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