Bitcoin and Altcoins Rise as Inflation Falls in the US

The Consumer Price Index report published by the Department of Labor shows that US inflation fell to 8.5% in July, marking a sharper drop from 9.1% over the past year.

This revelation has surprised many in the Biden administration, who had predicted that inflation was savoring due to several factors such as the price increase and the war between Ukraine and Russia.

“Today we received the news that our economy had zero percent inflation in the month of July. Zero percent,” Biden said at the White House

Crypto jumps higher

Bitcoin and other major cryptocurrencies, which have been in freefall for the bigger months of 2022 due to macro concerns and the geopolitical climate, are in sharp decline.

Most cryptocurrencies across the board fell on July 9 in anticipation of the report, with bitcoin falling around 4% to $23,100 after surging above $24,000 on Monday, while Ethereum (ETH) fell over 5%. However, prices have rebounded, with bitcoin trading above $24,500 and Ethereum trading just below $1,900 at press time.

Biden aims to lower inflation

Reacting to the report, President Joe Biden emphasized that the current approach to curb inflation was working and that Congress must pass the Inflation Reduction Act.

“The economic plan is working, and second is to build an economy that will reward work,” Biden said at a White House news conference.

While inflation has accelerated, gross domestic product is reported to have fallen in the first two quarters of 2022, revealing that the economy was indeed priced out. The report highlights that energy costs eased for the month of July, falling 4.6%, despite maintaining a 2021 climbing curve of 32.9%. Petrol prices fell 7.7% month-on-month, providing some relief for drivers, but they were still 44% higher than a year earlier.

Food spending continued to rise, rising 1.1% for the month and rising 10.9% year-on-year, the biggest increase since May 1979, according to analysts.

The data has drawn mixed reactions from those sensitive to inflation and monetary policy trends. The prospect that U.S. interest rates will not rise as high as previously thought also weighed on the dollar, which fell more than 1% against a basket of currencies of major trading partners, according to the New York Times.

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