The cryptocurrency market was undeterred after the release of the latest US inflation report.
The US Department of Labor has released a new report revealing that inflation continued to worsen in February amid geopolitical tensions over the Russian invasion of Ukraine.
The consumer price index (CPI), the most widely used indicator to track inflation, rose 7.9% in the last 12 months, according to the government agency’s Bureau of Labor Statistics. Inflation accelerated to its fastest pace since January 1982. On a monthly basis, the CPI rose 0.8% in February, faster than the 0.6% increase reported in January.
The Bureau said the gasoline, food and housing indices contributed the most to the increase. Energy alone has risen 25.6% over the past year, with gasoline and natural gas rising 38% and 23.8%, respectively. It should be noted that the CPI measures a wide range of basic goods and services.
The rise to a new four-decade high is an indicator that the imbalance between supply and demand for consumer staples remains. The rate of inflation had started to rise since the COVID-19 pandemic and the money injection policies implemented by the US Federal Reserve. Now, a war in Europe between two of the largest exporters of oil, gas, grain and fertilizers around the world threatens to make things worse for the US economy.
Cryptocurrency market undeterred
Interestingly, the cryptocurrency market was unfazed by the news. Bitcoin and major digital currencies remained unfazedeven after the almost simultaneous publication of the inflation forecasts of the European Central Bank (ECB), which shared this Thursday an annual inflation projection of 5.1% for the European Union.
As reviewed CryptoBriefingthe ECB also shared its latest monetary policy forecasts and economic growth projections. The ECB He said that he foresees a downward growth for the next three years, at 3.7%, 2.8% and 1.6%. As well has decided not to raise key interest rates because of the war in Ukraine, but plans to start reducing monthly asset purchases.
The digital asset market was flat following the reports. Bitcoin (BTC) remained in bearish territory and is trading around $39,000. The second largest cryptocurrency, ethereum (ETH) extended price losses to settle around $2,600.
The stagnant price reaction was a departure from previous market reactions to inflation news. In recent months, Bitcoin and the main altcoins have been volatile after the CPI reports in the US. In fact, after the October report (in November), Bitcoin and Ether soared to new all-time highs. While moves have been less bullish since then, cryptocurrencies have so far been reacting to inflation reports.
The digital currency market has remained extremely volatile in recent weeks amid the uncertain geopolitical landscape. In the middle of this week, Bitcoin rallied above $42,000 amid expectations that the Joe Biden administration would sign a new executive order on cryptocurrencies. Prices have since registered a correction.
Article by Hannah Estefanía Pérez / DailyBitcoin
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