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US Inflation Jumps to Fresh 4-Decade High of 8.5% in March ($ETH, $BTC, $FTM)

The U.S. Labor Department’s Consumer Price Index (CPI), a widely used metric to gauge rising costs of living, rose faster than expected in March to a four-decade high of 8.5% as supply-chain woes and the war in Ukraine pushed energy and food prices higher.

The headline CPI, which includes prices for all items basic for living such as food, housing, car, energy, consumer products, is now at its highest point since December 1981, the Labor Department said Tuesday. Analysts and economists had estimated an 8.4% inflation rate in March, according to the FactSet database.

Core inflation, which excludes seasonally volatile food and energy prices, rose 0.3% compared with the prior month, which was slower than the 0.5% expected by analysts.

The CPI report is closely followed by bitcoin (BTC) investors because the largest cryptocurrency by market value is seen as a hedge against inflation and currency devaluation.

Investors had sold off risk assets such as stocks and cryptocurrencies amid fear that a spike in inflation would prompt the Federal Reserve to accelerate monetary tightening and rate hikes.

Bitcoin, which recently hit a record-high correlation with the Nasdaq 100 index, dipped below $40,000 Monday.

Bitcoin price

Bitcoin (BTC) was changing hands around $40,509 as of press time.

Inflation in the U.S. was already at levels not seen in four decades, only to be exacerbated by supply chain disruptions and high energy prices last month because of Russia’s devastation in Ukraine.

Western countries led by the U.S. imposed wide-scale sanctions on Russian trade and banks after Russia, one of the globe’s largest exporters of commodities and natural resources, invaded Ukraine on Feb. 24.

White House Press Secretary Jen Psaki warned Monday the Biden administration expected the March CPI headline inflation data to be “extraordinarily elevated” and blamed the war in Ukraine and Russian President Vladimir Putin, saying the spike was “due to Putin’s price hike.”

The large gap between the headline and core inflation figures can be explained by the accelerated rise in food and energy prices. The energy index rose 32% over the last year, and the food index increased 8.8%, the largest 12-month increase since the period ending May 1981.
Appeared first on Coindesk

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