The recently announced inflation data for the first time in the last two years falls below 5%, an element that undoubtedly gives a respite to the traditional financial markets, but also to the cryptocurrency market so it is likely that we will start to see an early recovery in the price action in cryptocurrencies.
As officially announced, inflation falls one tenth from the March figure and stands at 4.9%, this moderation solidifies the Fed's decision to initiate a pause with interest rates, so, it is predictable that investors will turn their gaze back to risk assets such as cryptocurrencies.
It has been indicated that CPI has fallen below 5%, specifically to 4.9%, in April for the first time in two years. Prices are moderating sharply, which will allow the Fed to end rate hikes for good (barring catastrophe) .
It was also disclosed that the last time inflation was below 5% in the US was precisely in April 2021, just two years have passed since then. The big difference is that in 2021, core inflation was still at 3%, which gave the Fed hope about the possible temporariness of the rise in prices.
According to experts, the time has finally come: after ten consecutive rate hikes and a 500 basis point tightening, the Fed's monetary tightening cycle is probably over, with the next downward move.
In this sense, while the Fed and the rest of the world's central banks are crossing their fingers that inflation will come down naturally, the ideal ground is being prepared for the cryptocurrency market to generate a rally in price action that will consolidate the main cryptocurrencies by market capitalization.
SOURCES CONSULTED
ElEconomista. Inflation falls below 5% in the U.S. for the first time in two years. Link
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The cover image was designed by the author: @lupafilotaxia, incorporating image: ElEconomista
