Breaking: Bitcoin Surges Past $26,000 as US CPI Reveals Annual Inflation Rate of 6% in February
Inflation rose in February, but the increase was in line with expectations, which will be a critical input into whether the Federal Reserve will continue to raise interest rates. According to a report by the Labor Department, the consumer price index (CPI) increased by 0.4% in February, bringing the annual inflation rate to 6%, matching the Dow Jones estimates. Excluding food and energy prices, the core CPI increased by 0.5% in February and 5.5% over the last 12 months.
The news has created a positive impact on the crypto market, with major cryptocurrencies seeing gains of over 10%, according to CoinMarketCap. Bitcoin prices skyrocketed by 17% to surpass $26,000, reaching $26,274 in trading, while Ethereum recorded a 13% increase to $1,747. Other cryptocurrencies, including OKB, LTC, SOL, DOT, and BNB, also experienced gains ranging from 5% to 25%.
Wall Street giants are confident about the U.S. Federal Reserve dropping its aggressive rate hike policy amid the banking crisis in the U.S. The latest nonfarm payrolls and unemployment data also support a 0 or 25 bps rate hike in March. Goldman Sachs, for instance, no longer sees a case for the Federal Reserve to deliver a rate hike at its meeting next week, citing “recent stress” in the financial sector. The firm had earlier expected the Federal Reserve to hike rates by 25 basis points.
Analysts believe that the Fed will print again after the CPI, and Bitcoin will go parabolic. Others suggest that quantitative easing (QE) may be on the cards to inject liquidity amid the banking crisis in the U.S. after a closed-door meeting on Monday. Fed Chair Jerome Powell is also likely to drop the rate hike plan this month, creating a positive sentiment among investors.
In conclusion, the rise in inflation in February has been in line with expectations, and it will be a crucial input for the Federal Reserve to decide whether to continue raising interest rates. The positive impact on the crypto market has been substantial, with several major cryptocurrencies seeing double-digit gains. Wall Street giants are confident that the Federal Reserve will drop its aggressive rate hike policy amid the current banking crisis in the U.S. and are expecting quantitative easing to inject liquidity into the economy.
Read more:
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- Fed’s Decreased Likelihood Of Rate Hike May Affect Cryptocurrency Market In The Next Week