Crypto Markets Fall After Report Of U.S. Inflation Rise To 9.1%

Crypto markets plunged in reaction to the U.S. Bureau of Labor Statistics’ announcement this morning of a yearly inflation rate of 9.1%, up from 8.6% last month. The headline Consumer Price Index, which describes the cost of living in the United States, jumped 1.3% in June. The inflation rate for the month was slightly above consensus, which had estimated a value closer to 8.8%.

The announcement highlighted increases in the prices of gasoline, food and shelter as key drivers of inflation growth. The gasoline index increased by 11.2%, driving a 7.5% monthly increase for energy as a whole. This month’s announcement is the highest inflation rate since November 1981, spurred partly by the Federal Reserve's decision to keep interest rates low throughout the pandemic.

Crypto markets reacted quickly to the announcement. Immediately after the 8:30 EST announcement, Bitcoin BTC fell from $19,898 to a low of $19,093 by 8:44, a 4% drop.

Ethe ETH reum fell 6% to $1,022 by 8:44, from $1,089 just before the release.

The U.S. dollar briefly overtook the Euro immediately following the announcement; the two currencies reached parity yesterday for the first time since 2002.