Plunge

FOMC

Bitcoin

Impact

April

<h2 id="key-points">Key Points</h2>
<ul>
 <li>Bitcoin value dropped as US wholesale inflation in April exceeded predictions.</li>
 <li>Higher-than-anticipated inflation might influence the Federal Reserve’s future monetary policy decisions.</li>
</ul>
<p>Bitcoin’s value experienced a decline on Tuesday, coinciding with the US wholesale inflation rate for April surpassing economists’ predictions.</p>
<p>The leading digital asset by market capitalization has tumbled below the $62,000 mark, marking a 1.6% decrease in the past day to trade at $61,731 by 10:10 a.m. ET.</p>
<h2 id="us-inflation-data">US Inflation Data</h2>
<p>The US Bureau of Labor Statistics reported on Tuesday that the Producer Price Index (PPI) increased by 0.5% in April, exceeding the anticipated 0.3% rise.</p>
<p>Market players are keeping a close eye on Tuesday’s PPI and Wednesday’s Consumer Price Index (CPI) for potential implications on interest rates.</p>
<p>Analysts from Wintermute have stated that the US Federal Reserve has established a criterion for initiating monetary easing – three consecutive softer inflation readings.</p>
<h2 id="impact-on-federal-reserve-s-monetary-policy">Impact on Federal Reserve’s Monetary Policy</h2>
<p>The unexpectedly high wholesale inflation data might provide valuable insight into how the Federal Reserve could shape its monetary policy decisions in future Federal Open Market Committee (FOMC) meetings.</p>
<p>The increased wholesale inflation could pressure the US central bank to sustain higher interest rates for an extended period, a scenario that could deter investment in risk assets like <a href="https://crypto.ro/en/cryptocurrencies/bitcoin/" rel="noopener noreferrer nofollow">Bitcoin</a>.</p>
<p>Following Tuesday’s PPI report, the CME’s FedWatch tool now predicts a 29.2% possibility of a rate cut at the FOMC meeting in July and a 48.9% chance at the September meeting.</p>
<p>Interest traders anticipate a 91.3% likelihood that rates will remain unchanged at the June meeting.</p>
<p>Analysts from Wintermute’s OTC Trading Desk said in an email, “The FOMC has defined the bar to begin loosening monetary conditions as three consecutive softer inflation prints, we would expect a market response to any surprise beat or miss this week.”</p>
<p>In the same period, the GM 30 Index, which represents a selection of the top 30 cryptocurrencies, fell 2.18% to 126.96.</p>

Soaring US Wholesale Inflation Causes Bitcoin to Plunge

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