$BTC $ETH $BNB Trading Tips: What is CPI data and what impact does it have on the cryptocurrency market?
What is CPI?
CPI is the "Consumer Price Index", abbreviated as CPI in English. It is an indicator of price changes calculated based on the prices of products and services related to residents' lives, and is usually used as an important indicator to observe the level of inflation.
Typically, higher-than-expected CPI data may have an impact on the cryptocurrency market, especially on the prices of Bitcoin and other major cryptocurrencies.
What impact does CPI data have on the cryptocurrency market?
CPI data directly affects the monetary policy decisions of central banks (such as the Federal Reserve).
If CPI continues to be above the target level, the central bank may raise interest rates to curb inflation.
Interest rate hikes usually cause investors to withdraw funds from high-risk assets (such as cryptocurrencies) and invest in safer assets with higher returns, which may lead to a decline in the cryptocurrency market.
On the contrary, if CPI continues to be below the target level, it is good for the cryptocurrency market and may cause the cryptocurrency market to rise.
Take last night as an example:
US CPI annual rate in May, expected to be 3.4%, announced value was 3.3%, positive
US CPI monthly rate in May, expected to be 0.10%, announced value was 0%, positive
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