Bitcoin loses 6 %, stocks fall because inflation exceeds the estimates

Bitcoin loses 6 %, stocks fall because inflation exceeds the estimates

Inflation increased more than expected in August and recorded an increase of 8.3 % in the year. Data from the Bureau of Labor Statistics showed Tuesday.

The inflation data from Tuesday were lower than that of July, but higher than the expectations of the analysts. VPI from July Report by 0.2 % lower than forecast, which shows an increase in prices by 8.5 % in the annual comparison.

cryptocurrencies fell lower in the news and shares after the report. Bitcoin lost up to 6 %, while Ether fell by about 8 % and thus continued his decline from the beginning of the week, while the merger moves closer. The S&P 500 and the NASDAQ index opened by 2.3 % and 3 % lower, since retailers speculated about what the data meant for the future of monetary policy.

The Federal Reserve will meet on September 21, and analysts are largely confident that the central bank will choose a further rate increase by 75 basis points.

"The Fed's tightening cycles have led to so many recessions because they always look at the rearview mirror," said Danielle Dimartino Booth, CEO and chief strategy at Quill Intelligence LLC, on Tuesday during a panel discussion on the Digital Asset Summit in New York. "That is why the modern FED has started to consider the financial conditions as a bridge from the real economy to the markets and share prices."

The main priority of the Fed traditionally was the number of employment before inflation, but the current situation presents the central bankers with a unique challenge, said Michael Green, portfolio manager and chief strategist at Simplify during the panels. Continued tightening could lead to the inflation values ​​below the target rate of the Fed of 2 %, he added.

"It is very likely that we actually exceed 2 % and get into deflationary conditions that then stop," said Green.

"We will have tense financial conditions over a longer period of time, and that will probably be expressed in all possible problems," he said.

The reading comes weeks after Fed chairman Jerome Powell took a more aggressive attitude during his comments in Jackson Hole and slipped markets and cryptos.

"Estimates of long-term neutrality are not a place where you can stop or stop," said Powell during his speech on the second day of the Symposium in August, organized by the Kansas City Federal Reserve. "Our decision at this meeting in September will depend on the entirety of the incoming data and the developing prospects," he said.

The futures markets are now predicting a probability of 82 % for an interest increase by 75 basis points later in September after the publication of the CPI report Data from the CME group. After the meeting in Jackson Hole, the likelihood of a third increase was 75 basic points in a row at 55 %.

The dollar recovered in the publication of the consumer price index compared to other important currencies, with the DXY jumping over 1.5 % in the following hour.

. .

The contribution "Bitcoin loses 6 %, stocks fall because inflation exceeds the estimates" is not financial advice.