In short
- Bitcoin remained relatively just after the April inflation data showed that prices rose by 0.2%for the month, with annual inflation delayed to 2.3%, while core inflation kept stable with 2.8%.
- The Federal Reserve recently kept the interest rates at 4.25% -4.50% in the midst of economic uncertainty created by Trump’s rate policy, whereby markets now only display a 15% chance of an interest reduction of June.
- The US and China reached a surprise trade agreement on 12 May, reducing the mutual rates for 90 days, which stimulated the stock markets, but had a limited impact on Bitcoin, which traded around $ 103,798.
Bitcoin On Tuesday, just after new inflation data had the price growth in the US stable in April, so that no clear lighting offered for markets that looked the next step of the Federal Reserve.
At the same time, Washington and Beijing agreed on Monday to beat some of the toughest rates this year, another curveball for predictors trying to read the path of inflation ahead.
The consumer price index, a broad measure for goods and services costs in the US economy, rose 0.2% on a seasonal basis in April, said the American Bureau of Labor Statistics on Tuesday.
That meant a reversal from March, when prices fell by 0.1%. In the past 12 months, the index rose by 2.3%, compared to 2.4% in March and the slowest annual profit since February 2021.
With the exception of food and energy, core inflation rose by 0.2% for the month, matching expectations of the economist. The CPI core kept stable with an annual percentage of 2.8%, unchanged compared to March.
Economists expected that the index, which will follow price changes in a wide range of goods and services, would rise by 2.4% compared to a year earlier.
BTC, who had risen more than 10% last week, traded around $ 101,758 on Tuesday morning, rose briefly and has now fallen 0.3% to $ 103,798, according to Coenecko’s details.
Ethereum rose 0.5%, Solana only 0.1%, and knife coins such as Dogecoin And Shiba Inu were close to the aftermath of the new CPI report.
Traders and economists are now looking ahead to Thursday’s producer Price Index and the PCE lecture of 30 May.
Will this influence the Fed?
The inflation report arrives only a few days after the FED had on hold the interest rates, with reference to economic uncertainty driven by the tariff increases of President Trump.
During last Wednesday’s meeting, the Central Bank left its benchmark percentage at 4.25% -4.50% for a fourth consecutive time, with weeks of public pressure from Trump to oblique rates.
“The tariff increases announced so far are considerably larger than expected,” said FED chairman Jerome Powell in his press conference after the meeting. “All this policy is still evolving and their effects on the economy remain very uncertain.”
Yet Powell rejected the idea that politics was the response of the FED. “We are always going to do the same … use our tools to promote maximum employment and price stability,” he said.
But the markets remain volatile and from Tuesday CME Fedwatch only had a 15% chance of a rate reduction in June, decrease of 34% earlier this month.
The April report follows weeks of economic volatility. American shares have posted their best daily achievements on the news about a surprise trade since the beginning of April.
Commercial war devotion
On May 12, the US and China came in to lower 90 days of mutual rates, so that some of the “Liberation Day” measures were announced by President Trump.
The US rolled up import duties back on Chinese goods from 125% to 30%, while China reduced its retaliation rates from 145% to 10%.
Treasury Secretary Scott Bessent is planned to meet Chinese officials in Switzerland this week to discuss the next steps.
Markets took it as a positive sign. US shares gathered on Monday, with the S&P 500 booking its biggest win in more than a month.
Analysts say that the next Bitcoin movement decreases less due to inflation alone, and more about how the macro image changes.
“If CPI was hot, I expected a sharp drop, perhaps to $ 100k,” said Arthur Azizov, founder of B2 Ventures, said Decrypt.
Azizov warned against the interpretation of Bitcoin’s resilience as complacency and noted that it was actively “began to behave more like a macro instrument” as the institutional intake deepens, distanting his reputation as a pure speculative, risk-to-trading.
He said that a break under $ 93,000 with consolidation could lead to a decrease to $ 88,000, while a clean movement could open the door above his all time to “the next large reach between $ 124,000 and $ 134,000.”
Aurelie Barthere, main analyst on the Onchain analysis platform Nansen, shared with Decrypt That inflation is not the only data point that matters.
“Yes, we have already priced one rate reduction,” she said, “but April also saw a riser-eating lust powered by the US-China Reset and strong labor data. Unless the CPI core jumps above 2.9%, I don’t expect a hard reversal in crypto.”
She also noted that “Supercore” services excluding the houses in March had fallen to a low of 4 years of 2.9%, which points to softness below the surface.
“That is the statistics that the Fed closely monitors,” said Barthere. “Energy remains disinflation with. The real risk is if the inflation of services accelerates again.”
Published by Stacy Elliott.
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