Key facts:
Inflation for the past 12 months broke records again in March.
Gasoline, which rose 18% in March, is one of the most prominent gains.
In its monthly report of the Consumer Price Index (CPI) for the month of March, the United States Bureau of Employment Statistics (BLS) revealed a new annual inflation record of 8.5%, the highest in 41 years .
The monthly increase in inflation in March was 1.2%, which raised annual inflation for that month by 8.5% compared to March 2021. The BLS noted in your report that inflation reached its highest acceleration since 1981, following a surge in food and energy prices exacerbated by the Russian invasion of Ukraine. The increase was higher than expected by analysts.
When increases in food, energy and shelter are considered, the impact on consumers is much larger than 8.5%. The BLS noted that gasoline rose 18.3% in March and is responsible for more than half of the month’s increase. Food at home increased 10% in March, the highest increase in the last 12 months.
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The markets reacted lower after the announcement of the new increase in the CPI, by the expectations of new increases in interest rates by the Fed. The S&P 500 index registered a fall of 0.69% in the last 24 hours, while the Nasdaq fell 1.42% in the same period.
Bitcoin (BTC), which had dipped as low as $39,000 on Monday night, March 11, posted a rally on Tuesday. However, after the BLS announcement, the price of BTC dropped again. At the time of writing this article, the BTC price is USD 39,471, according to the CriptoNoticias price index.
On the occasion of the announcement of the consumer price index for the month of January, the price of bitcoin registered a rebound, as reported by CriptoNoticias. Currently, the correlation between bitcoin and stocks has increased significantly, which could have favored the fall of BTC.
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The CPI data includes, for the first time, the economic impact of the Russian invasion of Ukraine, which has caused a slowdown in the economy on a global scale. Russia is one of the main exporters of energy and, together with Ukraine, they are important suppliers of wheat and other grains to various countries in the world.