Bitcoin fell below $30,000 after inflation unexpectedly rose to 8.6% in May.
The consumer price index (CPI), the most widely followed benchmark for inflation, rose 8.6% year-on-year in May in the United States, beating expectations for a drop to 8, 2% after 8.3% in April. Core CPI – which excludes food and energy costs – rose 6% year-on-year in May, down from April (6.2%), but higher expectations of a 5.9% increase.
On a monthly basis, the CPI rose 1% in May, beating expectations for a 0.7% gain and more than tripling April’s 0.3% gain. The benchmark index rose 0.6% in May, which was flat compared to April, but above expectations for a 0.5% rise.
Headline inflation’s unexpected new four-decade high of 8.6% is problematic for monetary policymakers who are in the midst of a rate-hike cycle but might have considered a pause at some point. given later this year. Now the question might be whether the US Federal Reserve should raise rates by 75 basis points, rather than the planned 50 basis points.
Bitcoin (BTC) – which, like almost all assets, took a hit when central banks in Western countries began to tighten monetary policy in recent months – fell from $30,000 to $29,500 within minutes of the report. It remains down about 65% compared to its absolute record reached last November.