US CPI Inflation Falls to 4.9% in April! What to Expect from Crypto Next?

On Wednesday, the US Bureau of Labor Statistics announced that the inflation rate in the US, as indicated by the change in the Consumer Price Index (CPI), dropped to 4.9% in April. Following a robust April Nonfarm Payrolls report, the United States Dollar (USD) has been striving for a cautious recovery. Moreover, the Loan Officer Survey released by the Federal Reserve (Fed) on Monday revealed that the US credit conditions were more favorable than anticipated, further contributing to the US Dollar’s resurgence.

US CPI Exceeds Expectations

The U.S. Bureau of Labor Statistics has announced that the Consumer Price Index for All Urban Consumers (CPI-U) experienced a 0.4% rise in April on a seasonally adjusted basis, a slight uptick compared to the 0.1% increase seen in March. Before seasonal adjustment, the all-items index saw a growth of 4.9% over the past 12 months. The shelter index led the monthly increase (up 0.4%), followed by the used cars and trucks index (up 4.4%) and the gasoline index (up 3.0%).

In April, the energy index climbed by 0.6% (-5.1% year on year), while the food index remained steady (7.7% year on year). The index for all items excluding food and energy also experienced a 0.4% growth in April, with several indexes like shelter and motor vehicle insurance witnessing increases.

However, the indexes for airline fares and new vehicles declined during the month. The all-items index’s 12-month growth was 4.9%, representing the smallest increase since April 2021. Over the past year, the all items excluding food and energy index rose by 5.5%, the energy index dipped by 5.1%, and the food index climbed by 7.7%.

What to Expect From Crypto Market Next?

In April, inflation experienced a deceleration for the 10th consecutive month, according to a closely monitored report released on Wednesday. This development comes as a relief for American households grappling with rising expenses and for Washington policymakers working to control swift price surges.

As the US inflation Consumer Price Index (CPI) recently fell short of expectations, the financial world is buzzing with speculation on how this development will impact various sectors, including the crypto market. In a climate where many anticipated a surge in inflation, this unforeseen drop in the CPI has brought forth several considerations on the crypto market’s potential trajectory

With inflationary pressure subsiding, investors may perceive cryptocurrencies as an effective hedge against currency devaluation. This could drive more interest in digital assets, pushing prices higher as demand increases.

As the Federal Reserve adjusts its monetary policy based on the CPI, lower inflation could lead to a postponement of interest rate hikes. This scenario may support the cryptocurrency market as investors seek higher yields in alternative assets.

As of writing, BTC price quickly surging from $28K and is currently trading at $28,136 with a surge of 1.72% in the last 24 hours.