Breaking: Worse Than Expected CPI Results In Crypto Slide
The Consumer Price Index for September is worse-than-expected. Consumer prices increased by 0.4% on a month-on-month basis while the CPI increased by 8.2% on a YoY basis instead of the expected 8.1%. The core CPI also came out hotter than expected. Core CPI highlighted an increase of 0.6% instead of the expected 0.4%. On a YoY basis, the core CPI increased by 6.6% instead of the 6.5% that was predicted. The worse-than-expected CPI resulted in an immediate selloff in the crypto market.
Bitcoin fell close to 2% in a matter of a few minutes. It is currently trading at $18405. On the other hand, Ethereum is dangerously close to falling below the $1,2K mark. ETH fell by 2.33% in a few minutes and is currently trading at $1217.
Volatility In The Crypto Market Due To CPI
The crypto market is struggling due to macroeconomic factors. The Binance Coin fell close to 3.52% in the last 24 hours and close to 1% in the last hour. XRP continues to defy macroeconomic fluctuations and surged by over 1% in the last hour. Solana fell over 1% in the last 24 hours, continuing its downward slide.
The Federal Reserve considers the Consumer Price Index while evaluating the level of inflation in the country. It is engaging in quantitative tightening and interest rate hikes to curb the inflation level in the country. It had already increased interest rates by four consecutive 75 bps jumbo hikes. After bad inflation data, another 75 bps hike is now extremely likely.
Moreover, the market is also pricing in the likelihood of a 100 bps hike. The last time the market priced in a 100 bps hike, it resulted in a massive selloff in the crypto market. The crypto market is already seeing a massive downward movement.
Will The Fed Go Overboard
The Fed will likely go forward with an extremely hawkish stance to curb inflation levels. However, the hawkish stance of the Fed will likely result in recessionary fears in the global economy.
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