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Following yesterday’s consumer inflation data, today the Producer Price Index (PPI) data has been released. Despite yesterday’s inflation data, BTC is showing shallow volatility. Negativity prevails in the cryptocurrency market, and experts believe that we are approaching a significant decline in BTC price. The situation in August and September, compared to previous years, supports this possibility.
US Inflation Data Analysis
Yesterday’s Consumer Price Index (CPI) data showed a 0.2 point increase in headline inflation, while core inflation remained stable compared to the previous month. Considering the ongoing increase in fuel prices, it is likely that the decline in inflation will reverse for a while. The Federal Reserve (Fed) does not expect to reach its 2% target quickly; they have repeatedly stated that they have until 2025 to achieve it.
Producer inflation is crucial for the Consumer Price Index (CPI) as it directly affects the prices of goods and services. Moreover, it is a leading indicator. Therefore, cryptocurrency investors closely monitor the Producer Price Index (PPI) to predict the direction of future data.
The previous month’s PPI was announced as 0.1% annually, and the expectation for this month was -0.4%. Meanwhile, the core PPI was expected to be 2.1% compared to the previous month’s expected 2.4%. However, the announced data exceeded expectations.
US PPI (Expectation: -0.4% Previous: 0.1% Annual) Announced: 0.8% Annual, 0.3% Monthly. Therefore, the data is not favorable for cryptocurrencies. In the coming hours, investors may witness selling in the crypto market due to the halt in the decline of core PPI on an annual basis. Additionally, this data (along with yesterday’s CPI) could negatively affect gold and lead to a strengthening of the dollar, supporting hawkish rhetoric from the Fed.
