June 5, 2023

Bitcoin Rises as U.S. Inflation Declines

It was revealed this Wednesday, August 10, the United States Bureau of Employment Statistics (BLS), that inflation for the month of July was 8.5% compared to July 2021, a figure below market predictions of 8.7%.

For June, after the record figure of 9.1%, the reduction in inflation reported this Wednesday, August 10, was attributed to the drop in gasoline prices and other energy items.

After the announcement, the price of bitcoin (BTC) rebounded vigorously, going from USD 23,096 to USD 24,002, half an hour after the reduction was known. In the last hour, this impulse, which in the case of bitcoin was 3.25%, was also registered among the main cryptocurrencies. At the time of writing this article, the price of bitcoin is USD 23,892, according to the price index.

The Fed announced last July an increase of 0.75% in rates after knowing in June the highest rate of inflation in 40 years, which was 9.1%. The Fed will announce the next rate increase on September 21. In addition to the reduction in monthly inflation, there is the fact that an increase in interest rates is not scheduled for this month, which accentuates the feeling of relief for the market.

The Federal Reserve has set a series of rate hikes among efforts to combat inflation, of which it has executed 4 this year, as reported by Cryptobtcbrowser. These increases are intended to slow demand by making loans, from home loans to auto loans to business loans, more expensive. There are fears that if the Fed is too aggressive in this policy, it risks increasing unemployment or pushing the economy into a recession.

However, in July the general inflation index grew 8.5%, the increase in food was 10.9% and in energy products and services the increase was 32.9%. But, even so, there was a noticeable decrease in gasoline prices, which have registered a downward movement for 57 days, going from 5 dollars a gallon in June, to 4.01 dollars this Wednesday. Posted by Cryptobtcbrowser, news and information agency.


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