U.S. CPI Softer Than Expected at 0.3% in April; Bitcoin Rises to $63.7K

As a researcher with a background in economics, I find the recent inflation data and retail sales report intriguing. The modest decline in both headline and core inflation rates in April came as a surprise to many economists, including myself, who had anticipated a more significant increase based on previous trends. This unexpected easing of price pressures is likely due to various factors such as slowing economic growth and decreasing energy prices.

Inflation in the United States slowed down slightly in April as reported by the Consumer Price Index (CPI) from the government, with a increase of 0.3%, which is lower than the 0.4% rise seen in March and the predicted 0.4% growth based on economist forecasts.

The remaining parts of the report indicated modest decreases, as anticipated. Yearly, the Consumer Price Index (CPI) increased by 3.4%, consistent with predictions of 3.4% and 3.5% for April. Core CPI, which takes into account the costs of goods other than food and energy, grew by 0.3% in contrast to projected gains of 0.3% and 0.4% in March. On a year-over-year basis, core CPI registered an increase of 3.6%, aligning with expectations of 3.6% and a previous reading of 3.8%.

As a crypto investor looking back at 2023, I had anticipated that the persistent decrease in inflation would lead to more accommodative monetary policies from major central banks like the U.S. Federal Reserve in 2024. However, the unexpected rise in inflation so far this year has changed the narrative. With a growing economy, the prospects of any immediate rate cuts have been dashed. The likelihood of a summer rate cut by the Fed was already low based on market expectations, with only a 50% chance suggested by the CME FedWatch Tool for a move in September.

As an analyst, I would rephrase it as follows: The retail sales data for April was released concurrently with the inflation figures, revealing a stagnant reading compared to the anticipated rise of 0.4% and the previous month’s growth of 0.6%. The retail sales figure excluding automobiles also showed a subpar increase of 0.2%, in line with expectations but marking a decline from March’s robust expansion of 0.9%.

As a crypto investor, I’ve noticed some encouraging signs in traditional markets today. The positive reaction to soft inflation and solid economic data has boosted S&P 500 futures by 0.5%, while the 10-year Treasury yield retreated seven basis points to settle at 4.37%. The U.S. dollar index has taken a hit, dropping 0.5%, and gold has gained 0.7% in response.