The price of bitcoin increased 15% as investors awaited encouraging U.S. inflation statistics
One of the factors driving the increase in the price of bitcoin (BTC) since Friday is the anticipation that the U.S. Consumer Price Index report on Tuesday would show weaker inflation in August.
But the new information might indicate that, despite a cooldown in price pressures, it is still too heated for Federal Reserve officials to stop tightening monetary policy. The “totality” of the data that Fed Chair Jerome Powell will see indicates little signs of cooling in the economy, and possibly even some growth, according to economists at Bloomberg. “August inflation gauges will likely be very modest, but that won’t affect the bottom line,” they said.
A FactSet survey indicated that the CPI was likely risen 8.1% over the previous 12 months in August. With a four-decade high of 9.1% in June and a pace that is down from 8.5% in July, this would be the second consecutive monthly fall. It is anticipated that while food prices increased last month, prices for gasoline, air travel, motels, and used cars decreased. The goal of the Federal Reserve is 2% every year. The European Central Bank increased interest rates by 75 basis points, or 0.75 percentage points, the greatest hike in ECB history, which sparked a surge that saw bitcoin gain 15% over the weekend.
At the time of publication, the price of bitcoin, the largest cryptocurrency by market capitalization, was at $22,153, its highest level since mid-August. According to a report by the IMF, the current 3.7% unemployment rate in the United States may need to increase as much as 7.5% for inflation to slow to the central bank’s target of 2% as reported by Reuters.