The U.S. Bureau of Labor Statistics reported a 3.8% year-over-year increase in the Consumer Price Index (CPI), with a monthly rise of 0.6% in April.
Source: U.S. Bureau of Statistics.The main driver of inflation was energy costs, which rose by 3.8% over the month, accounting for nearly half of the overall increase. Gasoline prices surged by 5.4%, while electricity costs increased by 2.1%.
Rising inflation in the U.S. often influences the Federal Reserve's monetary policy. Traditionally, high price statistics exert pressure on risk assets.
In anticipation of U.S. inflation data, investors reduced their exposure to volatile instruments. Futures for the S&P 500 fell by 0.4%, while Nasdaq 100 futures dropped nearly 1%. Technology companies saw the largest declines.
The digital asset sector showed little reaction to the data release, with Bitcoin's price decreasing by only 0.4% over the day. The leading cryptocurrency is trading at $80,919.
Hourly chart of BTC/USDT on Binance. Source: TradingView.Other assets also exhibited minimal movement.
Source: CoinMarketCap.New Fed Chair
Amid rising inflation, the Senate is preparing to confirm Kevin Warsh as the next Fed Chair. His nomination has sparked debate due to his ties to Wall Street and potential influence from the White House.
Senator John Kennedy directly asked Warsh during the hearings whether he would become a "puppet" of President Donald Trump, who is actively pushing for lower interest rates.
Experts note that Warsh will need to balance the demands of the president with reality: the military conflict in Iran has caused a spike in oil prices, complicating the case for rate cuts.
Researchers believe Warsh's experience in the financial sector (Morgan Stanley) may help him maintain independence, as Wall Street traditionally favors low inflation.
As a reminder, in February, the CPI remained unchanged, while the price of the first cryptocurrency jumped by 2.3% to $71,000.