• US annual Producer Price Index (PPI) has slowed down in March.
• Core PPI, which excludes volatile items such as food and energy, dropped to 3.4%.
• Lower-than-expected inflation figures may lead to a more risk-on environment for investments and positive impact on the crypto market.
US Annual PPI Slows Down
The US Bureau of Labor Statistics recently reported a decrease in the Producer Price Index (PPI) for final demand on a year-over-year basis. The PPI, which measures the average change in selling prices domestic producers receive for their output, decreased to 2.7% in March from 4.9% in February (revised from 4.6%). This development defied market expectations, which had anticipated a reading of 3%. Simultaneously, the annual Core PPI, which excludes volatile items such as food and energy, dropped to 3.4% from 4.5%, aligning with analysts’ predictions. On a month-over-month basis, the PPI and the Core PPI recorded figures of -0.5% and -0.1%, respectively
Month Over Month Change In Prices For Final Demand
In March 2023, prices for final demand excluding food, energy and trade services experienced a modest uptick of 0.1%, following a 0.2% rise in February. Over the 12-month period ending in March 2023, the index for final demand excluding these volatile components saw a 3.6% increase
Impact Of Lower Inflation On The Crypto Market
The crypto market is sensitive to macroeconomic indicators and these lower-than-expected inflation figures may have several implications for investors’ decisions when it comes to investing in cryptocurrency assets.. A slower rate of inflation may signal a less aggressive monetary policy response from the Federal Reserve potentially leading to an increased appetite for alternative assets like cryptocurrencies due to potential growth opportunities they present
Positive Development For The Crypto Market
Lower than expected inflation rates could be seen as positive development by investors looking into cryptocurrencies due to potential growth opportunities that arise due to increased appetite towards alternative assets like cryptocurrencies as well potential stability offered by Federal Reserves less aggressive monetary policy responses
Conclusion
The recent release of lower than expected US inflation data could have significant implications on investor strategies when it comes to investing into cryptocurrencies given its sensitivity towards macroeconomic indicators such as producer price index & core producer price index . Investors should pay close attention developments regarding this news over next few weeks & months so they can make informed decision when it comes investing into cryptocurrency assets .
