Hi HODLers and Hiveans,
U.S. consumer inflation expectations came in as 5% for December, versus expectations of 5.2%.
The 5% reading marks the second consecutive month of declines, and the lowest reading since July of 2021.
Bitcoin and ether prices continue to be impacted by Federal Reserve actions to slow inflation.
As you can see in the Dot Graph below, monetary policy should peak in 2023 and rates should be lower from 2024.
This is of course if inflations continues to lower and if inflation expectation from consumers do not go too high.
If cost shocks and supply disruptions keep inflation elevated for a long enough period, households’ and firms’ inflation expectations could move higher – a development that could put additional upward pressure on inflation.”
Low inflation = lower interest rates = higher crypto prices!
This is the magic formula but nothing is sure for now. Also, a tougher recession than expected could hurt all asset prices including cryptocurrencies.
Stay safe out there, volatility is here to stay!