Crypto’s Volatile Week Continues as Inflation Softens to 7.7%
- Inflation has registered a 7.7% year-on-year increase in October.
- The figure is 0.2% less than the analyst expectation of a 7.9% increase.
- The crypto market has bounced on the news, but it still down significantly this week due to the ongoing FTX insolvency crisis.
Share this article
The Consumer Price Index declined by 40 basis points in October.
Inflation Cools to 7.7%
U.S. inflation has declined for the fourth consecutive month.
The Bureau of Labor Statistics published the latest Consumer Price Index data Thursday, confirming that inflation softened to 7.7% in October.
The 7.7% figure marks a 40 basis point decline since September’s print. Inflation has been falling since it hit a four-decade high of 9.1% in June, though the Federal Reserve has made it clear on repeated occasions that it hopes to see inflation come in closer to 2%. Today’s 7.7% figure is 0.2% less than analysts’ 7.9% expectation.
The crypto market has reacted positively to the data. Bitcoin and Ethereum both jumped on the news that inflation has cooled more than expected. Although Bitcoin is still down 2% on the day after the bump, Ethereum has registered a 5% increase. However, the bounce has done little to repair the damage done by the recent FTX insolvency crisis, which saw Bitcoin drop to a new yearly low earlier this week.
Though inflation is falling, it’s remained sticky over the past few months, defying the Fed’s best efforts to tame the numbers. The U.S. central bank announced its fourth 75-basis point interest rate hike on November 2, causing another stock market selloff. It’s widely believed that the Fed will hike 50 points at next month’s Federal Open Market Committee meeting, bringing the funds rate to 4.25% to 4.5%.
While crypto investors have been calling for a Fed pivot for months now, this week’s FTX drama could have a lasting impact far beyond the U.S. central bank’s actions. Even if the Fed flips its stance to dovish over the coming months, the potential contagion effect from FTX’s collapse could send ripples across the industry for months. Additionally, rumors surrounding FTX’s possible misappropriation of customer funds may cause lasting reputational damage to an industry that’s been met with skepticism among mainstream onlookers and regulators alike. Even if the macroeconomic situation improves, trust and confidence in crypto have hit new lows thanks to the FTX crisis.
Disclosure: At the time of writing this piece, the author owned ETH and several other crypto assets.
Share this article
The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
See full terms and conditions.