In October, the inflation rate in the United States increased to 2.6%, according to the Consumer Price Index (CPI). This is exactly what many experts predicted. The CPI measures the average price of goods and services, like food, housing, and clothes, over time.
Last month, inflation in the US was slightly lower at 2.4%, so this small increase didn’t surprise most people. Monthly inflation stayed at 0.2%, showing no major changes. However, a closer look at the Core CPI (which excludes food and energy prices) showed a small increase. It went up to 0.3% from the previous month, while the yearly Core CPI remained steady at 3.3%.
The total CPI in October was recorded at 315.66, just a little above the expected 315.59. Experts from big institutions like Citi, HSBC, and JP Morgan were correct in predicting this rise, while Wells Fargo thought it would be slightly lower at 2.5%.
Inflation in India
In India, inflation was much higher. It rose to 6.2% in October, which is a big jump from September’s 5.5%. This is the highest inflation rate India has seen in 14 months.
The main reason for this spike was the sharp increase in food prices. The Consumer Food Price Index (CFPI) climbed to 10.87% in October. Essential items like vegetables, fruits, and cooking oils became much more expensive.
Even when we leave out the volatile food and energy prices, inflation still increased. The Core CPI rose to 3.7%, its highest in 10 months, compared to 3.5% in September.
What About Cryptocurrency?
While inflation numbers came out, the cryptocurrency market didn’t show big changes. The total value of all cryptocurrencies is now about $3 trillion, the highest since 2021. Bitcoin, the most popular cryptocurrency, recently reached an all-time high of $89,940 before slightly dropping to $89,000.
This small dip shows that most investors were already expecting the inflation numbers and didn’t panic. Bitcoin’s market value is now $1.74 trillion, making it the 9th largest asset in the world.
Impact of Trump’s Win
One reason for Bitcoin’s recent rise is Donald Trump’s win in the U.S. elections. His victory has boosted investor confidence, especially in cryptocurrencies. Institutional investors, or big companies, have been buying a lot of Bitcoin recently.
Another boost for Bitcoin came from the popularity of Bitcoin ETFs (Exchange-Traded Funds). On November 11, trading volume for U.S. spot Bitcoin ETFs reached $8 billion, the highest since March. BlackRock’s iShares Bitcoin Trust alone handled $4.5 billion in trading.
Federal Reserve and Interest Rates
In September and November, the U.S. Federal Reserve reduced interest rates by a total of 75 basis points. Lower interest rates usually encourage people to invest more in assets like cryptocurrencies. If the Federal Reserve continues to cut rates, it could lead to a bigger rise in Bitcoin and other digital currencies.
The Role of Elon Musk and Vivek Ramaswamy
Donald Trump has also made an interesting move by appointing Tesla CEO Elon Musk and entrepreneur Vivek Ramaswamy to lead a new government department called the Department of Government Efficiency (DOGE). This department aims to reduce waste in government spending and improve operations.
This announcement aligns with Trump’s “Save America” campaign and has further boosted optimism in the market.
Final Thoughts
Inflation is rising, both in the US and India, but it’s having different effects on people and markets. In the US, the rise is small and expected, while in India, high food prices are causing a bigger impact.
Meanwhile, cryptocurrencies like Bitcoin are reaching new heights, partly because of institutional investments and the excitement around Trump’s policies. Some experts believe Bitcoin could even hit $100,000 by the end of 2024 if the current trends continue.
For regular people, keeping an eye on inflation and market trends is important. Rising inflation can affect everyday costs, but it also creates opportunities for investors.