US CPI for May 2023 Shows Lowest Inflation Rate in Two Years
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Summary: The monthly results were within expectations, while the yearly inflation rate of 4% is the lowest in two years. Post-inflation statistics, the FOMC is expected to suspend rate hikes at its June 14, 2023 meeting. Bitcoin is up 3%, as are other major cryptocurrencies.
On Tuesday, the Bureau of Labour Statistics released the Consumer Price Index (CPI) for May 2023 in the United States. Seasonally adjusted, the Consumer Price Index (CPI) for all urban consumers gained 0.1% in May, and it rose 4% in the prior 12 months, according to official data.
As a consequence, the annual inflation rate of 4% is the lowest it has been in around two years, and the results for the month were within forecasts.
Fed Expected to Halt Interest Rate Hike
Market participants expected a 0.1% rise, down from the 0.4% increase forecast in April 2023. The market, however, anticipates that the Federal Open Market Committee (FOMC) will opt to halt rate rises at their June 14, 2023 meeting, post the inflation data numbers.
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The Consumer Price Index (CPI) measures the average annual percentage increase or decrease in the purchasing power of urban consumers. There was a small uptick in the cryptocurrency market when the news broke. Bitcoin and most other major cryptocurrencies are also trading up.
Crypto Market Turns Green
Just before the release of CPI numbers, the price of Bitcoin spiked dramatically, crossing the $26,000 region. Bitcoin’s value surged about 3% from the day’s low of $25,700 after the data was released, before seeing some corrective movement.
Recent indications of decreasing inflation and the lowest annual inflation rate in two years may encourage the US Federal Reserve to pause its rate-hike cycle.
The CME FedWatch Tool predicts that the Federal Reserve will table any further rate rises at their upcoming meeting. Bitcoin is now trading at $25,921, an increase of 0.75 percent over the last 24 hours, as reported by CMC.
