Last Friday was not a good day for crypto investors in terms of macroeconomic data. However, uncertainties have begun to dissipate. The Federal Reserve’s decision on interest rates and long-term interest expectations is expected to be announced within a few hours. The inflation data released yesterday provided some relief to investors.
In November, inflation fell more slowly than expected due to fluctuations in oil prices. However, the US Consumer Inflation data announced just a few minutes ago is extremely important. While an annual Producer Price Index (PPI) decrease of 1% was expected, it was announced at 0.9%. The core PPI turned out to be 2% against the expectation of 2.2%. This indicates that the decline from last month’s core inflation of 2.4% will positively affect consumer inflation next month.
Bitcoin (BTC) may not pay much attention to the latest positive data, but it continues to see a reduction in inflation. With the latest PPI data, it is not difficult to expect that the December inflation data, which will be announced in January, will also be positive. If the interest rate expectations, which will be announced in a few hours, are not as bad as feared and if Powell avoids a hawkish stance, the rise in cryptocurrencies may continue.
In summary, the PPI data reflect a decrease in inflation, indicating that macroeconomic pressures will not likely drag down cryptocurrencies in the medium term.