Surprising inflation data sends markets reeling
From Yahoo Finance: 2025-05-15 12:27:00
Bitcoin is down over 3% to around $102,100 as new inflation data shows unexpected weakness in wholesale prices and consumer demand. The broader crypto market is also down, with Ethereum, Solana, and Cardano posting similar losses.
The Producer Price Index (PPI) fell 0.5% in April, despite expectations for a 0.2% rise. Core PPI declined 0.4%, with the largest drop in services prices since 2009. This weak inflation could increase the odds of Federal Reserve rate cuts.
April’s CPI rose just 0.2%, slightly below forecast, renewing hopes for Fed rate cuts in 2025. Lower inflation and softer consumer strength create mixed signals for crypto assets, potentially impacting investor sentiment.
Year-over-year, headline PPI rose 2.4%, while core PPI came in at 3.1%. Cooling price pressures may give the Federal Reserve room to pause or cut interest rates later this year. Retail sales showed minimal growth, with consumers potentially pulling back in response to rising living costs.
The crypto and blockchain-related equity markets are feeling the sting, with Coinbase down 2.4%, MicroStrategy off 1.1%, and Robinhood down 1.6%. Miners like Marathon Digital (MARA) and HIVE Digital also dropped nearly 2%.