Slight Decrease in Inflation Boosts Bitcoin and Ethereum

Bitcoin and Ethereum have both seen mild gains following the latest release of the Consumer Price Index (CPI) report, which showed a slight decrease in the rate of inflation. The CPI is used to calculate inflation in the economy, and this decrease suggests that inflation is cooling. As a result, the Federal Reserve is likely to continue raising interest rates, but not as strongly as previously.

Higher interest rates can affect small businesses, individuals, stocks, and cryptocurrencies. Bitcoin saw a jump of around 4% over the past 24 hours, while Ethereum rose by almost 6%. Other key gainers within the top ten cryptocurrencies included XRP (4%), Dogecoin (5%), and Polygon (4%).

Higher interest rates can slow money movement in the economy, as people move their cash to savings accounts. The Federal Reserve has raised rates at an unprecedented pace to combat inflation. Inflation is a measure of the rate of change for the price of a basket of goods, which includes items such as milk and used cars.

The Federal Reserve usually reacts to inflation data by raising or lowering interest rates. In the past, rate hikes have been closer to 0.75%, but the next raise is expected to be closer to 0.5%. The Fed has made statements suggesting it will continue to raise rates in the future. Higher interest rates can affect the cost of borrowing from banks and the return on savings accounts.

Overall, the slight decrease in inflation, as measured by the CPI, has had a positive impact on cryptocurrencies like Bitcoin and Ethereum. However, the continued raising of interest rates by the Federal Reserve could have broader implications for the economy.