Although a Bitcoin above USD $22,000 seems a good sign, analysts warn that the FED could continue with increases in interest rates to deal with inflation, despite the fact that the indicators point to a positive evolution for the local economy.
- The increase in inflationary levels is expected to slow its growth
- However, this would not prevent the FED raise interest rates again
- Bitcoin has reacted positively in recent days after announcements of the ECB
- Analysts recommend caution and not trust what has been seen in recent days
Even though the crypto winter is far from over, there is certainly some enthusiasm in the market for the surge capitalized by Bitcoin In the past week. However, a report recently published by the media CoinDesk exposes the reasons why digital currency enthusiasts should not lower their guard yet, since the possibility of a new drop in the coming days is on the table.
Inflation could slow down… but Bitcoin could go down
The report in question brings together opinions from various analysts, who anticipate that the next consumer price report for the US will reflect that inflation has been slowing down its increase over the last month, the main reason why the price of Bitcoin It has been increasing since last Friday.
In this regard, economists Bloomberg warn that while price pressures may be falling, it is still too early to say that this will not lead to Federal Reserve (FED) to decree a new increase in interest rates, and add:
“August inflation indicators will probably be softer, but that won’t change the bottom line… and maybe even give it some acceleration. [a próximas medidas]”.
Though the next report by the Department of Labor will be published tomorrow, it is estimated that the CPI August rose 8.1% in the last 12 months, a rate that would represent the second consecutive monthly fall after the 8.5% registered in July.
Other reports indicate that the increase capitalized by Bitcoin was associated with the new increase decreed by the European Central Bank on interest rates, which rose about 75 basis points, registering the largest increase in the entire history of the entity.
Bringing down US inflation will be tricky
Although the European Central Bank followed this route, for the moment there is nothing to suggest that the US opts for different measures. Let us bear in mind that the president of the Fed, Jerome Powell assured that dealing with the current inflation will be a complicated process, which will bring some pain to the residents for the measures that would have to be taken to reduce the key indicators.
Following this path, the president of the Chicago Fed, Charles Evans, indicated last week that the FED will probably continue to aggressively increase interest rates, so we can expect a significant increase for next September 22, although the report of the CPI reveal that inflation is slowing down.
For his part, the representative of Insight, Brendan Murphy, assured that inflation will take time to fall to the levels established as a target by the Fed, so more forceful measures could still come to achieve such goals:
“The Fed has spent most of 2022 grappling with the implications of higher prices and committing to tighten monetary policy as necessary to ensure those price increases return to target. This means higher rates and tighter financial conditions until inflation is under control.”
Another indicator that the US is watching is a possible increase in the unemployment rate, which the media Reuters anticipates can increase up to 7.5% until inflation levels fall below 2% with the measures that the government has been applying. FED. The research carried out ensures that this is inevitable in order to control inflation, so it recommends that people prepare for possible adverse scenarios.
Bitcoin has evolved favorably
Although it is not clear what could happen with Bitcoin in the coming days, the truth is that the digital currency has had a fairly positive behavior in recent days.
After reaching lows close to USD $18,640 last Tuesday, September 6, the price of the digital currency experienced a sudden recovery between the 8th and 9th of this month, when it managed to overcome the previously exposed lows and began to trade above of USD $21,000 per unit.
At the time of publication, the digital currency is trading at around USD $22,397, capitalizing on an increase of 3.45% in the last 24 hours.