Figures and truth – Did the US Federal Reserve’s reaction to inflation come late? RBC Capital Markets Chief Economist Tom Porcelli, think : “The Fed is now late”. Most central banks have also distinguished themselves in 2021, by a gap between their reassuring speeches on inflation and reality economy and financial markets. Could 2022 finally smile at a Bitcoin (BTC) that started the year in the red?
FED and inflation in the United States: these records that bitcoin delights in
The United States Bureau of Labor Statistics released data on January 12, 2022 showing a Consumer Price Index (CPI) hitting record highs in the country. The CPI for December 2021 has indeed reached 7% year-on-year, registering an increase of 6.8% compared to the previous month’s figure. The Chinese journalist known on Twitter as Wu Blockchain pointed out that it is the ” highest level since June 1982 “.
The core CPI has meanwhile reached 5.5% in December 2021, the level highest since February 1991. This rate is up 4.9% from November 2021. The core CPI subtracts from the Consumer Price Index, the price of energy, food, and other items considered as volatile and which could give a false impression of inflationary pressure. The figures speak volumes, however, and show the reality of runaway inflation.
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Rising consumer prices: a short-lived joy for Bitcoin?
The Fed wants to control inflation by reducing its support for the economy, through a reduction in its asset purchases and by planning to raise interest rates in 2022. The president of the institution, Jerome Powell, has moreover confirmed this desire of the central bank to go in this direction the day before the publication of these data on the CPI, stressing that this high inflation represented a ” a serious threat For the recovery of the labor market in the United States.
These figures, a source of concern for the Fed and the Biden administration, work in favor of safe havens like Bitcoin. The latter was also able take back the $ 44,000 on the day the CPI data is released, so that he had recently lost the $ 40,000.
These one-off increases in Bitcoin, against the backdrop of an unfavorable US dollar announcement, should not, however, rule out the structural threat to bitcoin : if the Fed actually manages to regain control of inflation in 2022, via the faster tightening of its monetary policy, some commentators promise tougher times at BTC.
These billionaires who therefore advise allocate part of your portfolio to Bitcoin would they continue to be right in 2022? The year has only just begun, and nothing is decided yet, whether for the bears or the bulls.
Who’s Afraid of Inflation? No one, until it devalues the value of your holdings in fiat money. If you want to easily buy bitcoin as a hedging asset or invest in other altcoins, register on the KuCoin platform and start trading your BTC or other cryptos there today! (affiliate link)