Bitcoin has plunged 2.58% to trade at $29,500 after inflation showed a jump of 8.6% on a year-to-year basis in May.
BTCUSD is down -2.67%
The core inflation CPI, excluding food and energy costs, jumped 6% year-over-year in May, dropping from April’s 6.2% but beating estimates of 5.9%.
The unexpected surge in inflation is causing concerns for the regulators who are set to increase the interest rate and have been looking at a potential pause during the year.
Analysts are looking into whether the Fed will have to raise rates by 75 basis points per meeting instead of the expected 50 basis points.
The founder and CEO of Affinity Solutions, Jonathan Silver, notes that there are positive signs that the inflation is already behind. Silver adds that the job market was expanding and giving people funds, but high inflation rates remain challenging.
The President of the Federal Reserve Bank of Atlanta, Raphael Bostic, has hinted at potentially pausing the rate hikes in September if inflation moves in the right direction. The inflation report is a major economic indicator expected to inform the Fed’s decision.