US Treasury Secretary Janet Yellen on Tuesday said inflation in the United States remained too high although it has moderated in the last two quarters. She made the comments ahead of Wednesday’s release of the Consumer Price Index (CPI) data by the U.S. Bureau of Labor Statistics. If the CPI numbers for the month of March 2023 point to higher inflation, chances are that the US Federal Reserve could continue rate hike with a 0.25% rise when the Federal Open Market Committee (FOMC) meets in May 2023. Meanwhile, the crypto market is jubilant as Bitcoin price crossed the much anticipated $30,000 milestone.
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The Treasury Secretary also expressed caution over recent hurdles in the US regional banking sector. Yellen also mentioned the possible negative economic effects due to Russia’s war against Ukraine.
Inflation In US “Too High”
Speaking ahead of meetings at the meetings at the International Monetary Fund and World Bank on Tuesday, Janet Yellen said inflation in the country remained too high. However, she commented that the banking system in the country was in a good shape and that the global economy was resilient, Reuters reported. Despite easing in banking system after the closure of few regional banks in March 2023, the US is facing a new challenge in the form of speculation over dedollarization. This is leading to rising confidence on the potential of Bitcoin and crypto market if efforts towards alternate to the dollar based global financial system.
Meanwhile, traders seem to believe the US Fed’s spree of interest rate hike could peak and see a “Fed pivot” sooner or later in 2023. According to the CME FedWatch Tool target rate probabilities for the May 3, 2023 meeting, the market anticipates a repeat of 25 bps hike.
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