Inflationary pressures are rising in the US, what does this mean for Bitcoin?

2022 is dominated by inflation and central bank interest rate hikes to extinguish that inflation. Unfortunately for us investors, central banks have yet to succeed in bringing inflation under control. In this case we are talking “unfortunately” because interest rate increases have a negative effect on the prices of Bitcoin and other financial assets.

Inflationary pressure is increasing

Now the Cleveland Federal Reserve’s short-term inflation expectations seem to be pointing in the wrong direction again. Friday, the University of Michigan Consumer Sentiment Index For example, inflation expectations for the coming year are 4.6 percent compared to 3.6 percent in March.

And the Data from New York Fed March shows higher inflation expectations. Also, the New York Fed shared Report As wages show a rebound, so does the risk for inflation.

The median full-time wage in New York has now risen from $59,834 to $62,088 per year. In that sense, it might be interesting for the Central Reserve to intervene now so that this trend cools down and inflation does not rise again.

upward pressure

That is upward pressure on inflation Ina Hajdini of the Cleveland Fed Observations that the Federal Reserve should be more aggressive. In principle, this is possible because unemployment in the US is currently very low. Currently it is 3.5 percent.

That way, the Federal Reserve still has some room to raise interest rates and control inflation. New York Fed’s John Williams is slightly bullish on inflation.

Last week He shared Williams says he sees inflation falling from 5 percent now to 3.75 percent in 2023 and 2 percent in 2025. In that sense, it will take some time for the Federal Reserve to reach its goal, but it is slowly getting closer. Target on track with inflation.