According to data released on Wednesday, inflation in the US during July came in at 8.5%.
Wednesday’s Consumer Price Inflation (CPI) figures show inflation remained unchanged at 0.0% since June, however, it has increased 8.5% year-on-year. Today's figures come in below expectations and represent the first drop since April, which may well support the "peak inflation" narrative.
Analysts at Deutsche Bank said ahead of time, "we expect the headline year-on-year rate to finally dip after energy prices have fallen of late. We are looking for 8.8% (from 9.1%) with consensus a tenth lower."
Fidelity Digital Assets director of research Chris Kuiper told The Block ahead of time that a "lower-than-expected inflation print or falling inflation will likely be viewed as positive for digital assets as it gives the Federal Reserve and other central banks a reason to pause or even reverse tightening the money supply."
Bitcoin and ether saw major price swings last month as inflation in the US reached a 40-year high, jumping by 1.3% in June, an increase of 9.1% year-on-year – following today's news cryptocurrencies rallied.
Bitcoin hurtled towards $24,000 following the report, trading just short of this figure at $23,970 at the time of writing. Meanwhile, ether jumped over 4% in the past hour trading hands at $1,804, according to CoinGecko.
Kuiper expects macroeconomic conditions to continue to drive digital asset sentiment in the short-to-medium term, before going on to say "we think scarce digital assets like bitcoin will continue to provide an attractive alternative in a world of high leverage and financial repression in the longer term."
