Inflation in the USA has reached a four-decade high due to rising food, energy, and housing prices, and the continuing Russia-Ukraine conflict is projected to intensify the issue.
Inflation in USA hit after Russia-Ukraine conflict
Days before the US Federal Reserve (Fed) determines how to respond to the economy’s growing general price level, inflation looks to have become a primary concern both for Wall Street and Main Street. Elon Musk, the CEO of Tesla, asked followers in a tweet on Sunday what they believed about the expected inflation rate in the next few years. Even though buying physical assets is usually the ideal way to ride an inflation wave, Musk stated that he will continue to possess bitcoin, ether, and dogecoin. Inflation in the United States has reached a four-decade high due to rising food, energy, and housing prices, and the continuing Russia-Ukraine conflict is projected to intensify the issue.
In an interview last week, US Treasury Secretary Janet Yellen remarked, “We’re expecting to see another year where 12-month inflation rates stay very insanely high.”
The crypto community, including Musk and MicroStrategy CEO Michael Saylor, see bitcoin as a digital counterpart of gold and a hedge against inflation. Despite the fact that bitcoin has consistently underperformed gold due to expectations of quicker Fed monetary tightening, experts remain optimistic about bitcoin’s long-term use as a store of value asset.
The Federal Reserve is expected to hike borrowing prices by 25 basis points later this week, signalling that the fight against inflation will continue throughout the year. Markets appear to have priced in the first-rate rise since 2018. Bitcoin has plummeted about 40% in the last four months, owing to worries of a Fed rate rise.