The Bureau of Labor Statistics’ (BLS) Consumer Price Index (CPI) report for April revealed that the annual U.S. inflation rate eased to 4.9%, down from 5.0% in March, contrary to economists’ predictions of 5.0%. In response to this news, the price of bitcoin (BTC) experienced a slight increase of over 1%, reaching just above $28,000.
During April, the CPI saw a 0.4% increase, meeting expectations for 0.4% growth, compared to the 0.1% rise observed in March.
The core CPI, which excludes food and energy costs, demonstrated a 0.40% increase in April, aligning with the forecasted 0.4% rise and matching the 0.4% growth recorded in March. The annual core CPI rate for April stood at 5.5%, in line with expectations for 5.5% and slightly lower than March’s rate of 5.6%.
In its most recent meeting held in May, the U.S. Federal Reserve’s Federal Open Market Committee (FOMC) hinted at the possibility of pausing its historic series of interest rate hikes. This move follows the central bank’s actions that saw the benchmark fed funds rate climb from approximately 0% in early 2022 to the current targeted range of 5.0%-5.25%. Despite the rapid pace of rate increases, the objective of bringing inflation down to the Fed’s target of 2% has not been fully achieved. Furthermore, the central bank is closely monitoring the mounting challenges in the U.S. banking system, which have resulted in the failure of several regional lenders, most recently First Republic Bank.