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The cryptocurrency market has positively responded to the Consumer Prices Index today (CPI) and reducing the prospects for an escalating trade war between the United States and China. The demand for alternative hedge tools usually weakens in such scenarios, however, Bitcoin (BTC) has approached $ 109,000, while ETHER (ETH) has a 3 % profit, and trading more than $ 2,800.
Although it is too early to call it a direction, the encryption market seems to exceed some traditional assets. The S&P 500 was restored parts of its previous gains, which was initially driven by US President Donald Trump’s announcement of a new trade agreement with China.
According to the deal, both countries will return to the levels seen in February 2025, which reduces tensions and removal of revenge taxes. However, the performance of the stock market indicates that investors were scary, although this step has greatly reduced the risk of economic repercussions.
Bitcoin, Al -Atheer benefits from possible liquidity injections
The annual inflation rate of 2.4 %, which was reported by the American Consumer Prices Index, provided some relief, especially in the context of the high price concerns driven by the ongoing World Trade War. These developments usually enhance confidence in shares and strengthen the US dollar, but investors are still uncomfortable with the growth of the growing US government.
The US dollar index (DXY) decreased to its lowest point in seven weeks, indicating that investors are retreating from the dollar. This decrease usually indicates a decrease in confidence in the Federal Reserve’s ability to manage economic risks and increase anxiety over the country’s financial path. In response, market participants re -customize other major Fiat currencies.
On Tuesday, Jimmy Damon, CEO of JPMorgan Chase, was said to be the most prominent risk of private credit, an area that may become a problem during an economic shrinking period. According to CNBC, Dimon believes that the United States is still vulnerable to stagnation, especially since employment “will decrease slightly” and upward inflationary pressure continues.
“We didn’t really see much passes, if some were at all, from the definitions,” the chief economist at RSM Joe Prussuelaas told Yahoo Finance. In short, the lack of strong economic growth remains a major concern for investors. The longer the US Federal Reserve is currently the highest interest rates, the more likely the recession becomes.
According to the CME Fedwatch tool, the possibilities based on future contracts for federal reserve funds turned at the end of the year until the past month. Markets now mean 73 % chance that prices be 3.75 % or higher by December, an increase of 42.5 % a month ago.
Related to: Japan Bank Axis to QE may nourish Bitcoin Rally – Arthur Hayes
The higher interest rates practice a dual negative impact on the economy as they raise the cost of issuing and re -financing debts, whether for individuals, companies or government. In addition, interest rates that exceed the expected inflation tend to influence the assets with risk as fixed income yields are more attractive.
The initial signs of the separation of the stock market indicate that investors are looking for higher returns amid signs that the United States government is ready to raise the roof of the debt. Consequently, regardless of economic growth prospects, cryptocurrencies are seen as benefiting from this environment as traders expect additional liquidity from central banks.
This article is intended for general information purposes and does not aim to be and should not be considered legal or investment advice. The opinions, ideas and opinions expressed here are alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
