Crypto Market Rallies as U.S CPI Inflation Comes in at 4.9% for April

• When compared to the expected rate of 5%, April’s CPI inflation rate came in at 4.9%.
• The price of bitcoin has increased by 3% in the last 24 hours, now trading at $28,266.

According to the US Bureau of Labor Statistics, annual inflation in the United States for April came in at 4.9%, which was lower than the consensus estimate of 5%.

In addition, after increasing by 5.6% in March, the annual core inflation rate declines to 5.5% in April. As a consequence, the price of Bitcoin has begun to rise on speculation that the US Federal Reserve would halt and then proceed with interest rate cuts.

When compared to the expected rate of 5%, April’s CPI inflation rate came in at 4.9% lower than expected. It hasn’t been this low since April of 2021.

Fed Expected to Ease Interest Rate?

As annual inflation dropped below 5% in March, it is feasible that the Federal Reserve may change course in the coming months. However, the US Federal Reserve heightened risks for banks and the economy by raising interest rates by another 25 basis points.  As the debt limit and financial crisis approach, the Fed will be given a green light by the easing inflation to reduce interest rates.

The food index rose by 7.7 percentage points while the energy index fell by 5.1 percentage points. The 0.4% year-over-year increase in the CPI was in line with market estimates but much larger than the 0.1% increase seen in March.

According to CMC, the price of bitcoin has increased by 3% in the last 24 hours, and it is now trading at over $28,266. Over the last day, the price of ether has increased by 2%, taking it beyond $1878.