Today, which is important for Bitcoin, US inflation figures announced this afternoon – BTC Direct

Inflation figures for June are released in the US today. Will records be broken again, or is it not so bad this time? And what will be the impact on the market? In the time leading up to the release of these figures, bitcoin has fallen 2%.

Inflation is expected to be 8.8 per cent

The US inflation figures will be divided today at 14.30 Dutch time in June. The market expects inflation to reach 8.8% and the central bank to raise the Fed’s key interest rate target by 75 basis points. A base point represents 0.01%, so the interest rate will then increase by 0.75%. This will be the third rate hike in a row.

The Bitcoin price falls ahead of the announcement

The chart below comes from our bitcoin price page, the current price is 19,454 euros. This means that the value is 2% lower than 24 hours ago. Such percentages will frighten many stock and currency traders, but in the crypto world it is a normal Wednesday.

Over the weekend, it looked like bitcoin could comfortably fall above 20,000 euros, but prices appear to be reacting negatively to statements by White House Press Secretary Karine Jean-Pierre on US inflation.

The White House expects high inflation

No matter how you look at it, America remains the largest economy, and traders around the world are keeping a close eye on all US data. Therefore, all markets are looking forward to the press conference this afternoon.

So today, the US inflation figures will be published today. These are also known as the US Consumer Price Index (CPI). Jean-Pierre warned of the possibility that inflation will show up higher in June than in May.

“So on Wednesday we will have new CPI inflation data and we expect the overall figures, including gas and food, to rise massively, especially since gas prices were so high in June,” she said at a news conference on Monday.

Economists surveyed by Reuters expect the consumer price index (CPI) to rise on a monthly and annual basis in June by 1.1% and 8.8%, respectively.

What does this mean for bitcoin?

Let’s take a look at previous inflation releases this year. In the chart below, you can see increases or decreases on the day of the publication of the CPI and the effect on the bitcoin price.

The diagram says very little without the right context, because it is also about mood. Therefore, during the release date CPI, bitcoin price change and in parentheses the actual CPI versus the forecast. The expectations all come from the US Federal Reserve, the CPI itself comes from the US Department of Labor.

  • January 12: +1% (CPI 7.0 vs. Expectation 7.0)
  • February 10: -2% (CPI 7.5 vs. 7.2 expectation)
  • March 10: -6% (CPI 7.9 vs. 7.9 expectation)
  • April 12: +2% (CPI 8.5 vs. 8.4 expectations)
  • May 11: -7% (CPI 8.3 vs. 8.1 expectation)
  • June 10: -3% (CPI: 8.6 vs. 8.3 Expectation)

Economists expect a CPI of 8.8 to be announced today. Does that mean you have to be bearish now? Absolutely not, it’s just the statistics from the 2022 CPI reports.

All six previous months, the CPI was in line with or even higher than expected. This means that no CPI report has been published in 2022, where the actual inflation rate is lower than the consensus estimate. If they were, those numbers might look a little less ominous.

What if the CPI is lower?

There is a chance that the CPI this month will be lower than the expected 8.8%. Tom Simons, an economist at Jefferies, expects that the June CPI may not be quite right, which could mean that expected inflation is higher than it actually is. He points out that many stores have passed on too low inventories, which means that prices in practice may be lower.

He expects that if inflation figures for June come high, it may well be high and that markets will respond positively to this. But it could also just be that inflation is lower.

“If inflation turns out to be lower than expected, markets will also be encouraged,” he noted. “In any case, an emergency meeting is coming.”

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