US PPI Slows Down: How Will Crypto Market React?
• The US Bureau of Labor Statistics recently reported a decline in the Producer Price Index (PPI) for final demand on a year-over-year basis.
• The lower-than-expected inflation figures may have several implications, such as a less aggressive monetary policy response from the Federal Reserve and investors seeking out alternative assets, such as cryptocurrencies.
• These developments offer valuable insight into the stability of the economy and how it may impact the crypto market.
March US Producer Price Index (PPI)
The US Bureau of Labor Statistics recently reported that the Producer Price Index (PPI) for final demand decreased to 2.7% in March from 4.9% in February (revised from 4.6%). Additionally, the annual Core PPI, which excludes volatile items such as food and energy, dropped to 3.4% from 4.5%. On a month-over-month basis, the PPI and Core PPI recorded figures of -0.5% and -0.1%, respectively. Prices for final demand excluding food, energy, and trade services experienced an uptick of 0.1%, following a 0.2% rise in February over 12 months ending in March 2023 with index at 3.6%.
Implications on Economy
The release of lower-than-expected US inflation data for March indicates underlying price pressures facing producers that are crucial to understanding stability of economy.. This could signal a less aggressive monetary policy response from the Federal Reserve which could lead to more risk-on environment for investments offering potential growth opportunities for investors .
Crypto Market Reaction
The crypto market is sensitive to macroeconomic indicators like these lower inflation figures giving rise potential positive impacts on its prices as investors seek out alternative assets like cryptocurrencies to benefit from potential growth opportunities .
Final Demand Excluding Volatile Components
In March 2023 prices for final demand excluding food energy and trade services saw 0.1 % increase following February’s 0