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Gold and cryptocurrency markets predict recovery
Financial markets are expected to recover following the latest CPI data released by the U.S. Department of Labor. The better-than-expected report showed a slowing inflation rate on a monthly basis and compared to the previous year. According to the CPI data, U.S. inflation cooled with figures falling to 0.1% from the previous month.
This brought the annual figures to 3%, the lowest point since the pandemic began. The annual decline is the first in about three years, triggering positive sentiments for favorable macro conditions in traditional and digital markets. The all-time index rate fell from 3.3% in May, consumer prices fell. While gas prices fell 3.8%, housing and food prices rose 0.2%.
CPI to lift markets
Financial markets, including stocks, cryptocurrenciesGold prices saw a shift in sentiment fueling U.S. CPI data. Gold skyrocketed above $2,400 as hopes of interest rate cuts from the Federal Reserve grew. The precious metal touched $2,414, rising more than 1.8% in intraday trading. Similar sentiments were also seen in stocks, although some assets fell.
Chris Larkin, MD of Trading and Investing at Morgan Stanley’s E-Trade, explained that the CPI data brings the financial market closer to the expected interest rate cuts by the Fed.A lot can happen between now and September 18, but unless most of the numbers return to “hot” territory, the Fed’s reasoning for not cutting rates may no longer be justified.”
This comes closer to the Federal Reserve’s target of 2% annual inflation, and it has maintained its benchmark interest rate despite inflation having gradually declined over the years.
Another boost for cryptocurrencies
Positive macroeconomic sentiments serve as a strong indication of inflows into cryptocurrency markets. As the Fed eases pressure on markets, investors often send more funds to risk assets, signaling the growth of Bitcoin and other assets. Meme Coins they are expected to make another comeback after the expected jump. At press time, Bitcoin is trading at $57,545, down 0.3% in the last 24 hours, while the broader market cap is at $2.12 trillion hours after the CPI data was released.
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David is a financial news contributor with 4 years of experience in Blockchain and cryptocurrency. He is interested in learning about emerging technologies and has an eye for breaking news. Keeping up to date with trends, David has written in several niches including regulation, partnerships, cryptocurrency, stocks, NFTs, etc. Away from the financial markets, David enjoys cycling and horseback riding.