Inflation Falls Further in November, Bitcoin Jumps

Inflation has continued falling in the month of November since it reached a peak of 9.1% in June according to the Bureau of Labour Statistics.

“The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.1 percent in November on a seasonally adjusted basis,” the Bureau said. “Over the last 12 months, the all items index increased 7.1 percent before seasonal adjustment.”

The year on year increase of 7.1% is below expectations of 7.3% with a clear five months long downtrend now developing that will make any aggressive hikes by the Fed untenable.

Bitcoin is close to crossing $18,000 for the first time since FTX’s collapse starting on November the 9th.

Some of the gains were due to Sam Bankman-Fried, FTX’s founder, being arrested but we can clearly see a jump on the release of inflation data.

There was uncertainty regarding how inflation will go, with the markets potentially taken by surprise that the inflation rate has come in 6 points lower than in October.

According to CME’s Fed rate tool, 80% now expect an increase of 50 basis points in interest rates to 4.5%, and 20% expect a 25 points increase. None expect a 75 points hike.

Moving on, expectations are any increases will be even lower, 25 points or none at all, with the year of hikes so seemingly coming to an end.

Focus will then soon enough turn to the economy, but Fed’s GDPNow suggests the fourth quarter has seen growth of 3.2%.

That could mean the economy has been able to handle these rate hikes, and US may be able to both slow inflation while continuing to grow, the best of both worlds.