Inflation just reminded everyone it’s not done yet. The Bureau of Labor Statistics reported that the Consumer Price Index rose 0.6% in April, coming in hotter than economists expected and pushing year-over-year inflation to 3.8%, the highest reading since May 2023.
The numbers behind the spike
That annual rate climbed from 3.3% in March to 3.8% in April. April’s 0.6% monthly increase represents a deceleration from March’s 0.9% jump.
Energy was the primary culprit. Energy prices surged 3.8% in April alone, accounting for more than 40% of the entire monthly CPI increase.
Shelter costs, the single largest component of the CPI basket, continued their stubborn march higher. Food prices also posted moderate increases.
Core CPI, which strips out volatile food and energy prices, rose 0.4% month over month. On a year-over-year basis, core inflation stands at 2.8%.
Why crypto investors should pay attention
The mechanism is straightforward. Higher bond yields make risk-free government debt more attractive relative to speculative assets. When a Treasury bond pays a competitive return with zero default risk, the opportunity cost of holding Bitcoin, Ethereum, or any other non-yielding asset goes up.
Protocols offering 5% APY look a lot less attractive when Treasuries offer similar returns with a fraction of the risk.
Source: https://cryptobriefing.com/us-cpi-april-inflation-bond-yields/
