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How it will affect cryptocurrency markets
A critical data release is imminent and has the potential to shake up the cryptocurrency market in a big way. This isn’t your average economic report – this information could mean the difference between skyrocketing profits and unexpected losses for your cryptocurrency holdings.
Is it time to celebrate or prepare for impact? Read on to find out!
1. US inflation indices: a brief introduction
US inflation indices measure changes in the prices of goods and services over time. They provide valuable data for understanding inflationary trends in the economy. These indices help policymakers, businesses and individuals evaluate the rate of inflation and its impact on purchasing power and overall economic stability.
2. Key inflation indices will be released soon
Here are the main inflation indices that will be published this month.
- US core inflation rate on a monthly basis
It measures the monthly change in overall prices, excluding volatile food and energy costs, providing insight into underlying trends in inflation.
- US core inflation rate year-on-year
It tracks year-over-year changes in core inflation, offering a long-term view of price stability, unaffected by short-term fluctuations in food and energy prices.
It reflects the monthly change in overall consumer prices, including food and energy, capturing short-term fluctuations in inflationary pressures.
It indicates the year-over-year change in overall consumer prices, providing a broader perspective on inflation trends, inducing long-term effects.
It measures the average change over time in the prices paid by urban consumers for a basket of goods and services, which represents the overall cost of living.
Seasonally adjusted version of the CPI, which eliminates the effects of seasonal variations and offers a clearer view of underlying inflation trends.
It tracks changes in prices received by producers for goods and services, serving as an indicator of inflationary pressures in the production process.
It measures the monthly change in producer prices, providing information on short-term fluctuations in production costs for producers.
It indicates the monthly change in producer prices, excluding the volatility of food and energy costs, giving a clearer picture of underlying inflationary pressures in manufacturing.
It tracks year-over-year changes in key producer prices, providing a long-term view of inflationary trends in the manufacturing sector, unaffected by short-term fluctuations.
3. Historical analysis of the main inflationary indices
Let’s do a historical analysis of each inflation index.
3.1. US Core Inflation Rate Monthly: Historical Analysis
At the beginning of the year, the monthly US core inflation rate was approximately 0.392%. In February it recorded a decline to 0.358%. In March it increased slightly to 0.359%. The forecast is that this month it will be 0.3%.
3.2. US core inflation rate year-on-year: historical analysis
At the start of the year, the year-over-year U.S. core inflation rate was approximately 3.9%. In February it fell to 3.8%. In March it recorded no changes and remained around 3.8%. The forecast is that it will fall further to 3.7%.
3.3. US monthly inflation rate: historical analysis
In January 2024, the inflation rate in the United States was around 0.3%. It recorded a notable increase in February, when it went from 0.3% to 0.4%. In March it showed no change, having remained at the 0.4% level. The forecast is for it to fall to 0.3% this month.
3.4. US Inflation Rate YoY: Historical Analysis
In January 2024, the year-over-year U.S. inflation rate was approximately 3.1%. In February it increased slightly to 3.2%. In March it increased sharply to 3.5%. The forecast is that it will remain at the 3.5% level this month too.
3.5. US CPI: historical analysis
In January 2024, the US CPI was approximately 308,417 points. Since then its growth has been constant. In February it reached the level of 310,326 points and in March it touched the level of 312,332 points. The forecast is that this month it will exceed 313.9 points.
3.6. US CPI sa: historical analysis
In January 2024, the US consumer price index was nearly 309,685 points. The rate has been steadily increasing since then. In February it exceeded the threshold of 311,064 points. In March it reached the level of 312.23 points. The forecast is that the trend will continue like this, pushing it up to the threshold of 313.2 points.
3.7. US PPI: historical analysis
In January 2024, the US PPI was approximately 142,676 points. February saw a sharp increase, going from 142,676 to 143,466, quickly. The trend also continued in March, when it reached the level of 143,687 points. The forecast is that there will be no change in trend and the level of 143.9 points will even be reached.
3.8. US PPI MoM: historical analysis
In January 2024, US PPI MoM was nearly 0.4%. In February it increased sharply to 0.6%. In March, however, it recorded a sharp decline, when it went from 0.6% to 0.2%. The forecast is that this month too it will remain around 0.2%.
3.9. US Core PPI Monthly: Historical Analysis
In January 2024, the US Core PPI MoM was 0.5%. It has been steadily decreasing since then. In February it had fallen to 0.3%. In March it reached 0.2%, marking a sharp decline from 0.5% in January. The forecast is that this month too it will remain around 0.2%.
3.10. US Core PPI YoY: Historical Analysis
In January 2024, the year-over-year U.S. core PPI was nearly 2%. Since then its increase has been constant. In February it reached the 2.1% range. In March it reached 2.4%. The forecast is that this time it will be around 2.4%.
4. US Inflation Indexes Provide Insights into the Future Prospects of Cryptocurrencies: A Predictive Analysis
Historical analysis of major inflationary indices in the United States provides valuable insights into the future prospects of the cryptocurrency market. Looking at the trends:
- US core inflation rate monthly and yearly
Stable core inflation rates indicate economic stability. If future rates match predictions, this would likely support confidence in the cryptocurrency market. However, if rates were to fall, this could lead to a slight decline in enthusiasm for cryptocurrencies as a hedge against inflation. Conversely, a rise could spur demand for cryptocurrencies, particularly as a hedge against inflation, potentially driving prices higher.
- US inflation rate on a monthly and yearly basis
Similar to core inflation, overall inflation rates show stability. If future rates were in line with predictions, it would likely maintain confidence and stability in the cryptocurrency market. A decrease in inflation rates could have a slight dampening effect on enthusiasm for cryptocurrencies, while an increase could strengthen the attractiveness of cryptocurrencies as a hedge against inflation, potentially increasing demand and price.
Steady growth in the consumer price index signals healthy demand. If the next CPI levels meet predictions, it would mean continued growth and stability in the cryptocurrency market. A decrease in CPI levels could indicate an economic slowdown, leading to minor corrections in cryptocurrency prices. Conversely, rising consumer price index levels could strengthen the case for cryptocurrencies as a hedge against inflation, potentially driving up demand and prices.
The mixed trend in the producer price index suggests economic uncertainty. If the upcoming PPI levels match predictions, uncertainty in the cryptocurrency market may persist. A decrease in PPI levels could increase investor confidence in cryptocurrencies, leading to moderate price increases. Conversely, a rise in PPI levels could increase uncertainty, prompting cautious investment and potential shifts into more stable assets.
The stability of the main producer price index indicates confidence in economic fundamentals. If the upcoming Core PPI levels align with forecasts, it would likely strengthen confidence in the cryptocurrency market. A decrease in core PPI levels could ease inflationary pressure, resulting in moderate cryptocurrency price adjustments. Conversely, an increase could raise concerns about inflationary risks, potentially impacting demand and prices for cryptocurrencies.
Final note
The upcoming inflation data is set to be a turning point for the cryptocurrency market.
Stable or expected trends in core inflation rates, headline inflation rates, consumer price indices, and producer price indices will likely maintain confidence and stability in the cryptocurrency market. However, deviations from these forecasts could lead to adjustments in investor sentiment and potentially impact demand and prices in the cryptocurrency sector.
Will they signal economic stability and increase confidence in cryptocurrencies, or will they spark uncertainty and price fluctuations? Stay tuned.
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