Economy : US inflation drops To 2.5 % !

The financial markets are bustling as American inflation hits its lowest level in over three years. This news could have repercussions on the crypto market. A decrease in inflation generally means a reassessment of monetary policies. This could trigger a series of chain reactions, particularly among crypto investors. With the low inflation level, the Federal Reserve might take a more lenient approach at its next meeting.

A significant change in american monetary policy

Inflation in the United States, which peaked at 9.1 % in June 2022, continues to decline to reach 2.5 % in August 2024, its lowest level in three years. According to figures from the Department of Labor, this decline is primarily attributable to the decrease in gas and used car prices, while other sectors like real estate continue to see increases. For many experts, inflation seems to have been controlled, but the increase in housing prices remains a source of concern. These statements resonate as the Federal Reserve prepares for a crucial decision regarding interest rates.

With the drop in essential goods prices and the stabilization of food prices, observers believe that the Fed might proceed with a slight reduction of its key interest rates by 0.25%. However, some experts call for caution, especially due to continued increases in the services sector.

A decisive impact on the crypto market ?

While the decrease in inflation changes the dynamics of traditional financial markets, it also affects crypto. The relationship between monetary policy and crypto has always been close. A reduction in interest rates could mean a flow of liquidity into higher-risk assets like Bitcoin. Indeed, the crypto market has historically benefited from periods of monetary easing, as investors seek more attractive returns in alternative assets. Some analysts even predict renewed interest in staking and yield farming projects.

However, the reduction in interest rates does not guarantee an automatic increase in crypto prices. Macroeconomic uncertainty remains, particularly with regulators closely monitoring these assets. The SEC continues to take a strict approach, which could dampen the enthusiasm of institutional investors. Additionally, the intrinsic volatility of cryptos, accentuated by policy announcements, remains a risk factor for short-term investors.

Although the decline in inflation offers positive prospects for the crypto market, it doesn’t eliminate future challenges. The Fed’s reaction, regulatory uncertainties, and the global economic dynamics remain key elements to watch in the coming months.