Fast Take
The newest US inflation data has stunned analysts, with headline inflation year-over-year (YoY) coming in at 3.5% — 0.1% above forecasts.
The event is critical contemplating the Federal Reserve’s most aggressive mountain climbing cycle in many years, in keeping with Statista, which aimed to tame the rampant inflation that the central financial institution initially claimed was transitory.
Regardless of headline inflation bottoming out at 3% in June 2023, it has since risen to three.5% over 9 months later, with Fed funds presently hovering between 5.25% to five.5%.
Core inflation has maintained stability, hovering just under 4% since September 2023, as reported by Buying and selling Economics. Consequently, Bitcoin remains to be handled as a risk-on asset in the intervening time and as a by-product of the Nasdaq-100 Index (QQQ) primarily based on its drop beneath $68,000 on the CPI information.
Nonetheless, there have been situations the place Bitcoin behaved like a risk-off asset, akin to throughout the Cyprus crisis.
The inflation knowledge has additionally impacted bond yields, with the entrance finish of the treasury curve (3 and 6 months) indicating no rate cuts till Q3 on the earliest.
The DXY index moved greater above 105, and the USDJPY broke 152, a stage not seen since 1990. This may increasingly immediate the Financial institution of Japan to extend rates of interest to defend the weakened foreign money and its implications for the yen carry trade.
The submit Bitcoin’s dual nature: shifting between risk-on and risk-off amid market turbulence appeared first on CryptoSlate.
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