Fed Forecasts ‚Mild Recession‘ as Inflation Slows

• U.S. CPI inflation slowed to 5% from 6%, the largest single drop in inflation this cycle, Bitcoin exceeds $30K
• Credit uncertainty looms large in the short to medium term due to Fed’s aim to avoid past mistakes
• China and Russia also experience inflation drops, and the DXY index sinks to its lowest level in over a year

U.S Inflation Drops

The U.S Consumer Price Index (CPI) inflation has dropped from 6% to 5%, marking the largest single drop in inflation this cycle, while energy prices have gone into deflation for the first time since 2021. Core inflation however remains high with services inflating above 7%.

Fed’s Aim To Avoid Past Mistakes

The Federal Reserve is aiming to avoid making mistakes made in past cycles by focusing on credit uncertainty which could have a short-to-medium term impact on the economy.

Inflation Drop Across Other Countries

China and Russia are also experiencing drops in their own versions of inflation, while the US Dollar Index (DXY) has sunken to its lowest level in more than a year.

Implications of Falling Inflation

The implications of falling U.S CPI and other global versions can potentially affect the future of both the dollar and global economy as a whole.

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