US Inflation Rises to 3.8%, Bitcoin Remains Unmoved

US inflation rose to 3.8%, Bitcoin remained stable.

The US Bureau of Labor Statistics reported a 3.8% year-on-year increase in the Consumer Price Index (CPI). The monthly figure for April rose by 0.6%.

The primary driver of inflation was energy costs, which increased by 3.8% over the month, accounting for nearly half of the overall rise. Gasoline prices rose by 5.4%, while electricity increased by 2.1%.

Rising inflation in the US often impacts the monetary policy of the Federal Reserve. Traditionally, high price statistics increase pressure on risk assets.

In anticipation of US inflation data, investors reduced exposure to volatile instruments. Futures on the S&P 500 fell by 0.4%, while the Nasdaq 100 dropped by nearly 1%. Technology companies saw the most significant declines.

The digital asset sector showed little reaction to the data release. Bitcoin prices fell by just 0.4% over the day. The leading cryptocurrency is trading at $80,919.

Other assets also showed no significant movements.

New Fed Chair

Amid rising inflation, the Senate is preparing to confirm Kevin Warsh as the next Federal Reserve Chair. His nomination has sparked debate due to his Wall Street connections and potential dependence on the White House.

During hearings, Senator John Kennedy directly asked Warsh if he would become a “puppet” of US President Donald Trump, who is actively pushing for lower interest rates.

Experts note that Warsh will have to balance the president’s demands with reality: the military conflict in Iran has caused a spike in oil prices, complicating rate cuts. 

Researchers believe Warsh’s experience in the financial sector (Morgan Stanley) may help him maintain independence, as Wall Street traditionally prefers low inflation.

Back in February, the CPI remained unchanged, while the price of the leading cryptocurrency jumped by 2.3% to $71,000.