Altcoins such as Toncoin, Compound, and Maker jumped on Wednesday. The US has published strong data on consumer inflation as the CPI soared up to 3.7%. Crypto prices reacted modestly to the figures.
Gasoline is the main cause of inflation as the average gas price has increased to $3.85. The Brent WTI has now climbed above $89. Most analysts expected the Federal Reserve to leave rates unchanged in its September meeting.
Analysts from ING stated that “When measured to three decimal places, the 0.278% core print doesn’t look so bad. It is not a terrible miss, but markets will likely interpret it as showing the Fed can’t completely relax.”
The latest inflation figures have implications for altcoins such as Maker and Compound. PancakeSwap is a platform that focuses on lending and investments. People deposit their tokens, and they can expect to get a return. The interest rates on these platforms are not competitive with the current market. For example, the net earning APY for USDC is 3.62%.
If the Fed tightens up, more people may move to certificates of deposit (CDs) and money market funds. The total value locked in these ecosystems (TVL) has fallen sharply over the past decade.
In Toncoin’s case, the coin jumped after Telegram endorsed it. Rising inflation is also negative for other cryptocurrencies like Bitcoin, Ethereum, and Toncoin. You can read more about it here.