The Bureau of Labor Statistics released the eagerly awaited US Consumer Price Index (CPI) data today, which showed that the U.S. inflation rose 3.1% in November. Meanwhile, the market was also anticipating the data to show a further softening of inflation, reinforcing the belief that the Federal Reserve will maintain interest rates in its year-end meeting.
The global financial market, especially the crypto market, has been highly volatile this week, due to speculations over U.S. CPI data. Meanwhile, the investors have stayed on the sideline this week and put a pause before making further bets in the volatile market.
The latest Labor Department data revealed a 0.1% advancement in US inflation for November, in line with the market anticipation. The all-items index rose 3.1% annually, which comes in tandem with the market anticipation and down from a 3.2% surge noted in October.
Meanwhile, the Core CPI, excluding food and energy, saw an increase of 0.3%, in line with the market anticipation. Notably, the core inflation on an annual basis witnessed an advancement of 4%, which reflects what the market was expecting from the November data.
Investors eagerly awaited this economic data for insights into the economy’s trajectory. Despite the Fed’s commitment to a data-driven approach, the declining inflation and signs of labor market cooling have led to market speculation of a potential policy shift.
Meanwhile, following the CPI data release, the US Dollar Index fell 0.39% to 103.329 on Tuesday. Concurrently, the US 10-year Bond Yield decreased by 1.76% to 4.194. It’s worth noting that the CME Fed Watch Tool is now indicates a 98.4% probability of the central bank pausing its rate hike stance at the end of the upcoming Fed’s gathering on December 13.
The anticipation and soaring speculations over the U.S. CPI data have forced investors to run for the hill in recent days. The crypto market has noted a bull run since last month, sending the major cryptos like Bitcoin, and Ethereum, among others, to their yearly highs, before a notable decline witnessed in the prices this week.