Inflation growth in the US affected the price of bitcoin and stocks

Key facts:
  • After an initial drop in the markets, they later rebounded.

  • The increase in food in April was 9.4% and in energy 30.3%.

The US Consumer Price Index (CPI) for the month of April increased 8.3% from last year, 0.2% more than analysts expected. In the first few minutes after the announcement of the rise in inflation, the price of bitcoin fell 7% to below $30,000, although there was a moderate rebound afterwards.

Although the increase in prices for the month of April was slightly less than the 8.5% increase registered in the month of March, reported by CriptoNoticias, market expectations were around an increase of 8.1%.

In this way, the increase above expectations contributes to the uncertainty about the economic outlook for the United States for 2022. The measures of the Federal Reserve, regarding the increase in interest rates, do not seem to have had the desired effect. in a significant decrease in inflation

While the price of bitcoin (candles) fell from $31,536 to $29,711 in the first hour after the announcement, the Nasdaq index (blue line) fell 3.8% in the same period. Nevertheless, the price of BTC has registered a rebound in the last half hour and is trading at USD 31,212, at the time of writing this note.

BTC price fell with high inflation announcement for April 2022. Source: TradingView.

For the third time in a row, there are record increases in annual inflation in the United States in 2022, which have been the highest in four decades. The highest was reported for the month of March by Criptonoticias, although a record CPI increase in 41 years had already been recorded for the month of February.

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