Inflation increases again in June, Bitcoin slips, the stocks open lower

Inflation increases again in June, Bitcoin slips, the stocks open lower

Annual inflation rose again in June and exceeded the expectations of the analysts and reached 9.1 %, the highest level since 1981, according to the latest report by the consumer price index (CPI), which was published on Wednesday.

The core CPI, which excludes volatile food and energy prices, reached 5.9 %in the 12 months to June

Bitcoin and Ether slipped immediately after the publication of AB Report and lost 2.5 % or 3.4 %. At the beginning of the trading session, shares also opened lower on Wednesday. The technology -based Nasdaq lost 1.6 % and the S&P 500 started 1.4 % lower during the day.

Analysts were not surprised by the reaction of the markets, since investors avert to increasing prices from risk systems.

"You have decades of high inflation, low economic growth and [the] end of relaxed monetary policy," said Fawad Razaqzada, financial market analyst at the investment company City Index. "The large sale of the stock markets and the weakness of gold mean that investors have less available money to work, especially in highly speculative cryptoma markets."

The numbers from Wednesday draw an unfortunate picture for the officials of the Federal Reserve, who try to contain inflation. In June, the central bankers decided to increase the interest rates by 75 basis points, and analysts expect the same or higher interest increase in the course of this month, which means a final end to the strategy from the pandemic period.

The producer price index (PPI) report will be published on Thursday, which shows how the prices rise from the manufacturer's point of view. The preferred inflation measure of the FED is the central price index for personal consumption editions, the PCE, which will be published on July 29.

"As important as the CPI is, there is a school of thinking that says that the PPI provides useful information about the direction of consumer profession," said Nicholas Colas, co -founder of Datatrek Research. "If the producer inflation has reached its peak and begins to decrease, consumer disfigure should go in the same direction, since it is the last stop on the way that begins with raw materials and ends with personal consumption."

The departure of risk systems will probably continue, said Razaqzada, and cryptocurrencies will certainly fight for the foreseeable future.

"It is no surprise why investors are so pessimistic about cryptos at the moment," said Razaqzada. "The way in which prices have collapsed can be asked whether cryptos will ever experience the same type of mania that we experienced in Covid and previously in 2017 ... disturbed crypto lenders, worthless coins, difficulties in withdrawing funds and collapsed hedge funds all underline all the risks that are exposed to investors."

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