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The U.S. Labor Department released the consumer price index (CPI) report on Tuesday. Although inflation rose in February compared to the prior year, the increase was anticipated, and the overall inflation rate for the year was 6%. Some worries have subsided due to the declining inflation, but spreading worries about financial instability remain. The crypto economy jumps 11% higher while market analysts look forward to the Fed’s Decision on the federal funds rate.
Market Awaits Fed’s Decision on Interest Rates After CPI Report
According to the most recent U.S. Bureau of Labor Statistics report, consumer price index (CPI) growth in February was in line with predictions, rising by 0.4% from the previous month to 6% on an annualised basis. According to the CPI report, the all-items index rose by 6% over the previous 12 months before seasonal adjustment. In addition to the indexes for food, recreation, and home furnishings and operations, the index for shelter was the biggest factor in the monthly all-items increase, accounting for almost 70% of the increase.
The four U.S. benchmark stock indexes, except the Russell 2000, all recorded advances, strengthening the general outlook for the equity market. Except the Nasdaq Composite, three of the four benchmark indices were down on Monday. Furthermore, the two-year Treasury yield fell by the most during a three-day span since “Black Monday” in 1987 on Monday. Yet, the two-year Treasury rate increased after the CPI report on Tuesday.
Kevin Cummins, chief U.S. economist at Natwest Markets, claims that the market was not materially affected despite a decline in consumer inflation. According to the background, the CPI is no longer nearly as large of a market mover as we had anticipated, according to Cummins in an interview with CNBC. Also, the Natwest Markets analyst believes the Fed won’t increase the federal funds rate in March. Precious metals like gold and silver saw a slight decline around 9:00 a.m. (ET) on Tuesday, while equity markets somewhat improved following the release of the Labor Department’s CPI report.
Compared to the U.S. dollar, the cost of silver per ounce grew by 6% and the price of gold by 2% the day before, on Monday. Yet, according to the New York Spot Price, both precious metals fell at 9:00 a.m. on Tuesday, with gold falling by 0.80% and silver falling by 0.71%. On the other hand, the value of crypto economy significantly recovered, with the market cap of all cryptocurrencies rising to $1.13 trillion, up 11.17%. The second-most valuable cryptocurrency, Ethereum (ETH), surged 8.43% higher to $1,744 per ether, while bitcoin (BTC) increased by 14.72% above the $26,000 per unit region.
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